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Draw a circle, create pie-shaped pieces to equal five or six slices. Decide what types of investments you would be most qualified to monitor, tech, finance, bio-techs, automotive, insurance, health care, etc.

With the value of your 401K, divide the amount by the number of pie slices you have. That is the amount of money you will invest. The key to investing is diversifying your portfolio, so that if one sector drops, your whole portfolio won't be at risk. Depending on your comfort zone, you may want to have one pie slice in bonds, another in indices (which are diversifications within one market, or industry). You may want one pie slice in a low interest-paying money market - cash. You should feel comfortable about some risk, and some safety nets.

Read the Motley Fool suggestions and tutorials. They won't "Fool" with your money. Do your homework !!

My IRA holdings have more than tripled in the past four years, and "Yes", I am diversified !!

Good luck.
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