"As far as buying one stock a year, I guess it comes down to diversification... Is that $4 saved worth the loss of some instant diversification??? " If the one stock you picked last year was Enron, you clearly would have been much better off with a mutual fund! It is OK to develop your diversification over a period of years. The advice of Peter Lynch was not to invest in a company you don't understand. That would have kept investors out of Enron. So sure, you can save on commisssions, make just a couple trades a year, and next year buy a different stock. When you start go for such companies as General Electric, General Motors, your local utility, the salt-of-the-earth sort of company. When you have 30 or so stocks in different industries, then if you want to get a microcap it is OK. A rule I still stick to: when you get a double, sell half and buy a different stock. It helps speed up your diversification. Best wishes, Chris
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