Originally Posted by trumptman
Having all your portfolio in tech stocks, even if they are different tech stocks, is not diversification.
That was true fifteen years ago. Today, silicon is in everything, and it would be impossible for the high tech market to be universally affected by some event, barring nuclear holocaust. For example, if you own stock in a company that makes high-power LEDs or solar panels or, for that matter, train-engine maintenance electronics, they are going to respond very differently to market trends than will high tech that's "consumer" driven, like iPods, mobile phones, or handheld video games. And beneath all of them are often the same parts.
My advice to any budding traders is to pick a niche or two to focus on, and dump anything else into funds. Aside from the Apple stock that I have (which has been a stupifying return on investment over 6.5 years) I am mostly interested in technology IP investing. The payoffs in this niche usually come from "M&A." The rest is dumped into emerging-market funds. My other advice is that if you're young, be very risky. $15k can become $350k in a few years if you're lucky, but if you lose the $15k, in a few years that's probably not going to be such a big deal if you're the type who's seriously thinking about investing at that young age.