Richie Rich

People no longer want to read Headlines of “Financial Crisis,” “Bankruptcy,” and “Losses.” Spring is coming, the recession now appears to be over, but the economy is still weak and the unemployment rate is much too high.

Paul Robin Krugman, born in New York in 1953, a US Professor in Economics from Princeton University received attention when whistle blowing in April 2009 warned that Austria could be a leading candidate for state bankruptcy. Krugman himself made it clear in an essay about his “life philosophy” that he has no intention of following instructions since he does not claim to know anything special about life in general, but challenges people to think outside the box.

André Kostolany one of the most famous Stock Experts of the 20th Century once said, “Buy the stocks you like and go to sleep for 10 years, when you wake up, you will be rich”.

This certainly was the right investment style in the 20th Century and beginning of the 21st Century, however is this still valid advice in modern times? This is Richie Rich in volatility. Opinions are diverse regarding investment styles.

Some investors are long term, some are short term, others are a mix of both, the main question is who gains the most?

Even though the sun is still out the last weeks have been rough, volatile and stressful. A sincere disadvantage for portfolio managers. Investment is mathematics, save your feelings for the leisure time.

Portfolio diversification must be rock solid, and needs to include cash, bonds, funds, stocks, and some spare change for special events. Cash is for unforeseen liquidity requirements, bonds for constant return. Funds should be chosen globally to gain from general economic up swings. Stocks should be sector based. The spare change is for passionate, short term profits.

In this review we will be focusing on Sectors in Stocks.