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JiriNovotny · 11-07-2006, 05:59 PM

b__p:

Basically I agree with what you are saying. I've read a lot of books and some of these mentioned the "monkey" experiment. If I remember correctly, it has lead to one conclusion: diversification.

Do not forget that investing is all about chances. If the GE stock is meant to be the safe investment, yet is riskier than a diversified fund, and has the same ROI potential, there is no reason why he should be holding it. I am with pedrotn on this one.

Also, if I were him, I would run some virtual accounts on the side as well anyways, to try different strategies, or to trade with larger sums of money, etc.

I am not afraid to risk, I just won't do so if I don't have to. Trading with real cash when I can learn it first using virtual cash is a common sense to me.

I've invested in an Indian index fund and made a great profit, but I know that I was a bit lucky and it was a part of my diversified portfolio, so even if I would lose money on that one particular investment I would still be in plus. Sure, I could've put all my money into that Indian fund, but I also could've put it to some other fund where I would lose it. Too great risk for me.

However, I think that there are two types if risk: Risk to make a profit and risk that you can avoid. Getting GE instead of diversified fund is risk that you can avoid. Learning to trade with real cash instead of virtual cash is risk you can avoid.

Just my 2 cents. It is quite possible that toasterwater will make much more than two cents!

I am sorry if I've sounded too discouraging.

pedrotn:

I think that he has 45 days of free trading, so he can make these $100 investments. But I do not know how exactly does this free trial works.

11-07-2006, 05:59 PM	#17 (permalink)
JiriNovotny Senior Member Join Date: Nov 2006 Location: Czech Republic Posts: 125	b__p: Basically I agree with what you are saying. I've read a lot of books and some of these mentioned the "monkey" experiment. If I remember correctly, it has lead to one conclusion: diversification. Do not forget that investing is all about chances. If the GE stock is meant to be the safe investment, yet is riskier than a diversified fund, and has the same ROI potential, there is no reason why he should be holding it. I am with pedrotn on this one. Also, if I were him, I would run some virtual accounts on the side as well anyways, to try different strategies, or to trade with larger sums of money, etc. I am not afraid to risk, I just won't do so if I don't have to. Trading with real cash when I can learn it first using virtual cash is a common sense to me. I've invested in an Indian index fund and made a great profit, but I know that I was a bit lucky and it was a part of my diversified portfolio, so even if I would lose money on that one particular investment I would still be in plus. Sure, I could've put all my money into that Indian fund, but I also could've put it to some other fund where I would lose it. Too great risk for me. However, I think that there are two types if risk: Risk to make a profit and risk that you can avoid. Getting GE instead of diversified fund is risk that you can avoid. Learning to trade with real cash instead of virtual cash is risk you can avoid. Just my 2 cents. It is quite possible that toasterwater will make much more than two cents! I am sorry if I've sounded too discouraging. pedrotn: I think that he has 45 days of free trading, so he can make these $100 investments. But I do not know how exactly does this free trial works.