How I Learned That Diversification Is the Only Investing Game to Play

By Rick Kahler via

Fifty years ago I scraped together $100 that I earned moving lawns and invested in my first stocks. I had heard a person could make a lot of money owning stocks. The ones I bought were all very small regional companies that I selected with the help of a stock broker who said they had great promise. They all eventually went out of business.

The next time I had some money to invest, at age 19, I bought a house. My $1,000 down payment grew into $4,000 in a couple of years. I took that money and invested it into the futures market. Within days it was gone.

It probably isn’t a surprise that, after these painful lessons, I put my investable dollars into buying real estate. It took me 10 years to even consider investing money into the stock market.

While I did okay investing in real estate, my foray into more liquid investments could have been much less painful had I known then what I know now. Here’s what I finally learned: buying individual stocks and trying to beat the market is a game very, very, very few people do well at.

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