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Author: KlangFool One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 79074  
Subject: Re: Index fund investing versus stock selection Date: 10/6/2007 10:04 PM
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I agree with what other posted. But, I will give you a different point of view of why it makes sense.

1) Majority of my money is in index fund (90%)

2) Less than 10% of my money is in individual stocks.

For (2), why do you want to just beat the market?? If you are just going to beat the market by 5% to 10%, why bother?? You will be spending a lot of your time picking and monitoring the stock. You want to double or triple your money or it is not worth your effort. Now, if you are aiming for risky and high pay back stock investment, you do not need that much money for you investment / speculation to be worthwhile. 5% to 10% of your portfolio is more than enough if you bet correctly.

In my opinion, the main portfolio (1) will generate on the average annual return of 9%. For me to invest on any stock, it has to double or triple or it is NOT worth my effort.

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