Isn't One of The First Rules of Investing....

[Pepper]

...diversify your portfolio? aka don't put all your eggs in one basket.

I feel terrible for the people that are now penniless because of Madoff, but everytime I see one of them profiled on the news and hear them say, "I had my life savings invested with Madoff..." I wonder what the heck they were thinking.

I saw a lady on the news this morning, she and hubby had 1.6M with Madoff. That was their only investment. Maybe because it was doing so well, they just kept investing with him. I think she said she had been with him for over 20 years.

I would imagine they should have taken some of the profits and invested elsewhere.

[RichD]

Re: Isn't One of The First Rules of Investing....

but dont most people have all their investment with one advisor/investment house?...as far as they were concerned he was doing the required diversification for them. their statements probably showed that they were in a variety of markets and funds

[Pepper]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">but dont most people have all their investment with one advisor/investment house?... </div></div>

I don't. Not that I have 1.6M to invest, but the little I do have, I don't have it all in one place. I always thought that was too risky...or at least that is what I was told long time ago.

Like when Enron collapsed, and so many employees had most of their money riding on company stock. I thought, 'why would they do that' Aren't you always supposed to split thing up.

Maybe my thinking is part of the minority.

[RichD]

Re: Isn't One of The First Rules of Investing....

thin is not the same as all the money in one stock


how do you have yours distributed?

[Yuriatin]

Re: Isn't One of The First Rules of Investing....

List of Madoff victims. The map is interesting - it's crazy to see the concentration of losses on the coasts right?

Ouch! That poor little pension fund in Connecticut!

http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

<span style="font-style: italic">
(click thru for entire list)</span>

[Pepper]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">thin is not the same as all the money in one stock


how do you have yours distributed?



</div></div>

Yes, I understand that.
Basic example is my employer retirement fund. That is managed by Fidelity and I pick and choose the funds I want them to invest with. Some do well, some not so well.

I have retirement funds from my two previous employers. All three funds are managed by different investment houses, and have their own + and -. I could have all this money rolled into one account, but I choose to keep them seperate.

Maybe me just paranoid bout me money.

I don't have all my insurance policies through the same broker either.

[Pepper]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Yuri_</div><div class="ubbcode-body">List of Madoff victims. The map is interesting - it's crazy to see the concentration of losses on the coasts right?

Ouch! That poor little pension fund in Connecticut!

http://s.wsj.net/public/resources/documents/st_madoff_victims_20081215.html

<span style="font-style: italic">
(click thru for entire list)</span> </div></div>

Interesting map.
The NY/Florida concentration is obvious...Denver is interesting though.

[DiamondDave]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><span style="font-weight: bold">thin is not the same as all the money in one stock</span>


how do you have yours distributed?</div></div>

I think this is what's meant by diversify....I have one company that administers my 403(B), but my money is divided amongst several different funds...some are for long term growth and others for short term....

and FWIW, my financial adviser told me that if I can afford to, I should increase my contribution <span style="font-weight: bold">now</span> for when the market bounces back....

ETA: I see you understand that

[RichD]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Pepper</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">thin is not the same as all the money in one stock


how do you have yours distributed?



</div></div>

Yes, I understand that.
Basic example is my employer retirement fund. That is managed by Fidelity and I pick and choose the funds I want them to invest with. Some do well, some not so well.

I have retirement funds from my two previous employers. All three funds are managed by different investment houses, and have their own + and -. I could have all this money rolled into one account, but I choose to keep them seperate.

Maybe me just paranoid bout me money.

I don't have all my insurance policies through the same broker either. </div></div>

but supposed you had spent you entire career with one employer? how would you have broken up the retirement funds?

[Pepper]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: DiamondDave</div><div class="ubbcode-body">

I think this is what's meant by diversify....I have one company that administers my 403(B), but my money is divided amongst several different funds...some are for long term growth and others for short term....

and FWIW, my financial adviser told me that if I can afford to, I should increase my contribution <span style="font-weight: bold">now</span> for when the market bounces back....

ETA: I see you understand that </div></div>

But what if that company is doing something shady? And you don't really have what you think you have. Yeah, its a long shot...but it can and did happen.

Good idea about increasing shares now.

[Pepper]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">

but supposed you had spent you entire career with one employer? how would you have broken up the retirement funds? </div></div>

IRA maybe. I just used retirement as one example. And though I have three seperate funds (so far), I am not thinking I will be able to live off whatever income they will provide.

I don't claim to be an investment expert. I am just surprised that so many people with a good amount of money have it all with one firm.

[RichD]

Re: Isn't One of The First Rules of Investing....

i see what you are saying...though the whole market has been set up to encourage you into the one stop shopping ting..the banks want to provide investment advice and portfolio management as well as insurance

eta ..i would wager that the vast majority of eple event hose who claim to be well diversified are in this situation

[Pepper]

Re: Isn't One of The First Rules of Investing....

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">i see what you are saying...though the whole market has been set up to encourage you into the one stop shopping ting..the banks want to provide investment advice and portfolio management as well as insurance

eta ..i would wager that the vast majority of eple event hose who claim to be well diversified are in this situation </div></div>

Re the banking thing. Yes, I know they all want you do do one stop shopping. Recently read an article <span style="font-style: italic">(still kicking myself for not bookmarking it)</span> on the changes in banking laws Dubyah made while in office.

It was basically about how he silently de-regulated the industry. I was reading while on a con-call and can't recall all the specifics. But it was generally that before the lines were deeply etched between investing, loans, savings, etc. There were about 3 different things he signed and they all served to make most banking/investing one grey area.

The premise of the article was that by creating this one big grey area, that freed up the banks, and allowed certain types of investing, loans, etc. Which is part to blame for the crisis we are in now.

[Gen]

Re: Isn't One of The First Rules of Investing....

ummm birds of a feather flock together, most a dem jewish and did recommend dem one anedda to the fund


mi nuh care who you be, or how much you have to invest.

you do not put all your eggs in one basket.

x% with your employer (just enuff to get the matching)

x% with a brokerage (preferably discount)

x% if yuh want use a full service brokerage

x% if yuh want do your own ting wid an IRA

x% wid yuh conservative tings (treasury, cds etc)

Just note that all a the above, though they LOOK diversified could have overlapping instruments, but hopefully your mix and contribution amounts can cushion yuh before yuh get leff.

nuff of those madoff people were elderly. wah dem a do wid all dat money STILL in the stock market those funds should have been converted to safer money market a/c &amp; CDs \0/

[RichD]

Re: Isn't One of The First Rules of Investing....

whats the borkerage ting?


yuh mean to do yuh own trading?