Is it better to buy 200 shares in one company, or 100 each of 2 companies?
I am interested in both Bank of New York Mellon and General Mills. Is it better to dump enough in to buy 200 shares of one company, or do 100 into each?
In other words, do i get a bigger DRIP benefit buy having 200 shares, which would buy more of that same company... or instead spreading the same effect over two companies? Logically, I feel like it would be the same but I'm not sure.
- 9 years agoFavorite Answer
I know diversification is a tenant in all but I dont agree. You need to have confidence in yourself. Pick the best stock and make a profit of it. Plain and Simple. The best way to prevent against a big drop is being a pussy and not investing. I dont think your willing to do that. Sure diversification decreases your risk of losing. But it also equally decreases your CHANCE of winning. And if you are 51% sure you will win then it doesn't make sense to diversify. you can play to win, or you can play not to lose. You pick. Good luck.
- 9 years ago
It depends on a lot, but in general, many people prefer to diversify their investments by spreading them around more. However, if you put 200 shares on a company that will be more certain to make more gain, then you might as well dump all 200 into the more valuable company. If both companies are great, then it is a safer bet to divvy up your 200 between both companies.
As far as a bigger DRIP, I believe it depends on the investment company's DRIP policy. You have to inquire with your investment agent/company.Source(s): My accountant.
- Bob LoblawLv 69 years ago
It would depend on how well those companies end up doing and when you sell your shares. Generally it is better to be diverse but you don't want to be too diverse.
- RamonaLv 44 years ago
Why do you hate America? Ampad's failure can't be blamed on Bain. Would you rather that Ampad was given a half Billion by Nobama and then went bankrupt? You should have killed yourself on Christmas.
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- 9 years ago
diversify. eggs in two baskets is better than eggs in one.
don't kick yourself if one does better than the other. this is enevitable.