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Author: mskillz Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75776  
Subject: Portfolio Diversification Date: 1/17/2000 10:12 PM
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I'm 27 years old and have a Roth IRA and matching company 401(k). Should I diversify so that each account mirrors each other with respect to the types of assets, or should I diversify so that both accounts taken together reflect the desired level of diversification?
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Author: billjohn Big red star, 1000 posts Old School Fool Global Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17926 of 75776
Subject: Re: Portfolio Diversification Date: 1/18/2000 7:20 AM
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mskillz, My first reaction was "it doesn't matter." However, I don't know what you mean by "diversification" and how large the accounts are. On the first question, I would recommend that the vast majority (all?) be invested in equities. At your age with these long-term investment accounts, stocks (based on historical evidence) will produce the greatest return. If so, what diversification is called for? Individual stocks? The number of stocks depends on the total investments in the accounts and the amount of rebalancing you plan to do (especially in the IRA).

Hope this helps.

Bill

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Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 17976 of 75776
Subject: Re: Portfolio Diversification Date: 1/19/2000 9:59 AM
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<<<I'm 27 years old and have a Roth IRA and matching company 401(k). Should I diversify so that each account mirrors each other with respect to the types of assets, or should I diversify so that both accounts taken together reflect the desired level of diversification? >>>

I haven't yet met a 401(k) that let's you invest in individual stocks, therefore, your diversification will be handled by your Roth IRA. That is, at best you could hope to have a S&P 500 index fund as a 401(k) choice, if not, do the best you can. I'd put all my 401(k) money in one fund. In the Roth, I'd choose one or two MI screens to flesh things out, assuming you've enough money in the Roth to keep commissions below 2%.

JLC

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