[aquaswim47]

I agree with both MDZ and GIJOE based on my personal experience. I think it is best to do your research before investing.

My opinion is that we are at the top of the market since the FED will raise interest rates. The market anticipates a rate cut, thus don't expect it to go much higher. The fundamentals in the market are excellent, but it doesn't look like it has the room the skyrocket anytime soon.

If you should decide to invest, consider investing in 5-15 stocks (depending on the amount of research you can conduct). Some of these stocks, if you like them as companies and believe the fundamentals work, might end up being in your investment portfolio. Wish you the best. Happy studying.

Example:

1) JNJ (value) /GSK (mixed) /TEVA (growth) / MRK
2) GS/WM/TROW/SOV
3) AAPL/CSCO/MSFT/GOOG (avoid PALM, up 30%)
4) NOC/PG/LMT/GE/CAT/DE/UTX/MMM
5) JCP/COST/SHLD/CC (I consider CC to be better than BBY due to BBY's relationship with Gateway). The financials on BBY are quite strong. Also, I don't like GME since it rose over $29 per share (following the split)
6) T/VZ/CHTR/CMCSA
7) OXY/XOM/RDS-A or RDS-B/SUN
8) A company (companies) engaged in selling real estate or REITs, apartment leases, or business property. A company that has international operations may be worth a second look.
9) These are your gold, copper, timber, coffee, food products, tobacco stocks.
10) Consider LEND as a possible play in this segment. This is by far the riskiest section in that these stocks have the highest likelihood of default, such as microcaps and business turnarounds. You should definately consider international small-cap companies in this part of your portfolio. You should definately consider a basket of stocks, ETF, or mutual fund for speculative stocks. Speculative stocks can be in any industry, including financials, biotech, retail, and technology. I think the four stocks listed are decent plays (albeit, they are risky as are stocks, in general).

Am I Diversified?
Group 1 are your consumer staples / health-care stocks.
Group 2 is your financial service stocks.
Group 3 are your tech stocks
Group 4 are your defense/conglomerate stocks
Group 5 are your reliable retail stocks
Group 6 are your telecommunication stocks
Group 7 are your oil/energy stocks
Group 8 are your real estate stocks
Group 9 are your commodities/currency stocks
Group 10 are your speculative stocks.
Group 11 is your bond portfolio
Group 12 is your cash portfolio

This will hopefully ensure that no specific group has more than 20% in your portfolio when a group is also part of either groups 8-11.
For instance, if you had 15% in group 3 and 6% in group 11 that applied to the same companies or sector, you're not diversified, since your total stock exposure or exposure to the sector is 21% which is in excess of 20%. Groups 8-11 may apply to one of the sections (unless it is a government or municipal bond).

In actuality, you need to come up with a system of diversification that you're satisfied with. You don't want all of your eggs in one or too few baskets.