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<<Exactly, and you couldn't predict better or worse. But, I want to average 50%/year so I therefore should buy each recommendation to match the newsletter return. >>

I'd disagree here. Because even if the newsletter has achieved a 50% average annual return, there's no guarantee of that in the future. The future may bring better or worse returns. What the 50% tells me is that the picks have been far from dismal, overall, and are likely to continue being that way.

If you choose to buy a little of each of the recommendations, you probably won't earn 50%/year (instead, it'll likely be more or less), but you *will* set yourself up to mimic/track the newsletter's performance, whatever that turns out to be.

<< For example, look at this quote from the Stock Advisor (

"How many stocks should I own?
We want you to build a diversified portfolio that helps you maximize profits and minimize risks. You want to own enough stocks so that a few bad surprises won't ruin your returns, but not so many that your great selections are cast adrift in a sea of also-rans. As a rule, we recommend holding anywhere from eight to 15 stocks..."

If I take the above recommendation, I can't expect to match the advertised return of the newsletter unless I'm lucky. So do I concentrate or buy 'em all? That's just my observation.

Well, again, I concede that there's a contradiction here. But life is full of contradictions. I think an investor can do well concentrating a portfolio to 8-15 stocks (and for many people, this may be the best route). But I'll also agree that one can do quite well owning more. These are just different approaches, and sometimes more than one road will lead to Rome. :)

I wish that there was just one, clear way to invest most effectively, but I don't see that. Sometimes it's better to buy more of a falling stock, and sometimes it's better to sell. Some investors would do best with just an index fund, and others would do better with other funds or individual stocks, if they have the time and interest to devote to selection and monitoring.

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