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Hello Crazy Gang,
I've argued before that it might be better to have more companies with fewer money invested in them than to have fewer firms with rather more money in them.
I humbly suggest this course because the market is so up and down, that one could find a favourite company on the rocks. And if you only have a few favoured stocks in your bag, then you could be in danger of losing rather a lot.
However, the down side of the argument is that too many companies can lead to a lack lustre return. For example, if the average drop on shares in a year is 10%, then you are much more likely to lose 10% yourself if you have a wide range of companies.
Now I mainly talk here about Footsie shares. I have a different reason for spreading my money thinly among penny shares. My argument here is that if I hold a load of penny shares, I stand a bigger chance of bagging a really good profit on one or two of them.
As you've probably found, most penny shares seem to disappoint rather a lot. But there is occasionally a real star of a share which turns into a ten bagger or perhaps even a hundred bagger. These rare stars transform a penny share portfolio in a trice.
Obviously, the more companies I hold in my penny share bag, the more chance I have of getting a huge windfall like this. So that's why I have a little in a lot of penny shares.
Remember, messmates, a penny share investment can only lose 100% of your stake (even if you're dead unlucky). But the rewards can be limitless. Rock on!
To find out more about Malcolm CLICK HERE
UKSA is the leading independent organisation for private shareholders in the United Kingdom. It campaigns to protect your rights as a shareholder and runs educational activities for members.
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