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No. of Recommendations: 16
Perhaps jenpowell has narrowed down her prospective list and wants feedback on the finalists? If there is a tie for best of three, she can flip a coin or participate in each.

Risk by diversification is mitigated only to a certain degree, and it depends on the companies you choose. If you DRiP BPOP, WFC, and AMX (examples only, not a recommendation) you have essentially three banking stocks. However, you are diversified in the Financial Services sector. While each is a bank essentially, they each draw more of their business from a different aspect of the generic banking category. Picking companies in totally differentiated industries not only mitigates your risk to a higher degree, but in turn puts a drag on your portfolio's performance. One group flies high while the other drops as much, you break even. Generally, it isn't that perfect, but this is only a simple, virtual, hypothetical example.

Another risk mitigator is time. The more time you have, the less price fluctuations matter. Unless you are personally certain that the price will never advance higher within your time horizon, or have a better investment idea to plow your gains in to, and to take advantage of what you personally may view as an oversold situation and you shift additional funds to add to your stake. Otherwise, buy, hold, and repeat until you have met your goals and needs.

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