--- Grey Thomas <[EMAIL PROTECTED]> wrote: "'...we think you should have 100 stocks, minimum, representing more than 20 different industries.'"
Is is true that a major strength of diversification comes from the fact that stock prices have a log-normal distribution, i.e. percentage change is normally distributed, so that when a stock price goes up by x%, and then up by x% again, the gain in dollars is greater than the loss in dollars when it goes down by x%, and then down by x% again, thus, spread over a whole bunch of stocks going up and down, this effect translates into "free" money? Or something like that? So intstead of "merely" protecting you if but one of many firms tank, it also creates a sort-of money pump? If this is so, or if it isn't, couldn't you just spread around $10,000 for the same effect--or would brokerage fees eat up all the gains in that case? Curiously yours, jsh __________________________________________________ Do You Yahoo!? HotJobs - Search Thousands of New Jobs http://www.hotjobs.com
