[amyji]

Town recommends that until we get up to about $20k, we should keep all our funds in one stock. Cramer says that unless you have under $2,500, you should diversify among 5 stocks, with one being speculative.

So, for example, if I have $5,000 to start, I should put about $1k into 5 stocks spread among the sectors.

Sectors: Phil Town says we need to buy businesses we are familiar with, like and understand. For many of us, that would be retail industries. I'm a stay at home mom, former English teacher living in Thailand. I'm not in the tech industry, oil industry, or health and pharmacudical industry. At the moment, I know where I shop and it's either food or retail businesses I understand. Maybe some automotive since I drive a car and know what future car I'd like to purchase.

Cramer would say my portfolio isn't diversified enough! So how to come to a balance? Would you buy 2 or 3 stocks instead of 1 or 5? I think that's what I would do until I got up to some bigger funds to work with.

Thoughts?