Does multiple investing increase or decrease risk?

Does multiple investing increase or decrease risk?
Does your "multiple investing" refer to diverse fields (stocks, bonds, realestate, silent business partner, Mutual funds, etc.) diverse stocks (within several sectors or only one like drug companies) or to various times (fixed dollar averaging, etc) or posibly still something else?

Ask question more clearly, but very likely answer is yes.

I'm thinkin stocks and bonds.

I'm thinkin stocks and bonds.still an ill defined question, but not so badly. Are you thinking time distributed or how?

still an ill defined question, but not so badly. Are you thinking time distributed or how?

Not time distributed for stocks, but for bonds.

Not time distributed for stocks, but for bonds.this is last time I will try to get you to be clear in what you are asking. with reguard to bonds are you asking if varirious maturity dates of various bond of same company (say GM for example) changes your "risk factor" (to use your original term)? Even that is hard to say as yes there is less likely hood of default on bond which matures in 4 years than one which matures in 14, but the 14 year bond provides greater return and if sold in 4 years perhaps a higher net return, etc.

I will let someone else try to figure out what you are asking about as to me you are unable to ask clearly any queston on this.

I think the word you're looking for is "diversification." That's what financiers call it. Spreading your money around in "multiple" types of investments. Stocks, bonds, real estate, loans, commodities, currency, precious stones, fine art, collectibles. Each market responds differently to economic, political and cultural forces. In the long run they all appreciate so what you need to do is balance their short-term strengths and weaknesses against each other to come up with a maximum, minimum and expected yield, each with its own probability, that satisfies your own needs and your own willingness to take risks.

If you're younger than 35, the probability is very high that all of these markets will perform satisfactorily by the time you retire and need your money back. In that case all you have to do is diversify just enough that you're not betting your retirement assets on the fortunes of a single industry or a single housing market.

That's what mutual funds are for. They're a mixture of stocks and bonds in various industries, domestic and foreign, with some money market thrown in. The diversification is built in by experts. There are adventurous mutual funds that can make you rich but also bear a substantial risk of losing a bunch of your money. And there are conservative ones that will appreciate at an average rate somewhere between 5% and 8% per annum over the very long term, and in any case will more than compensate for inflation.

If you're not savvy about markets you're probably better off to invest in a mutual fund and let somebody who spends his whole life learning about the market keep an eye on your money while you pay his salary.

Otherwise, whatever you invest in had better be something that you're interested in, because you need familiarity and knowledge to be a wise investor. One of the wisest people I ever knew, who was doing quite well for himself, told me that if you love Persian rugs then you should just go out and invest in Persian rugs because you know what you're doing. You'll be able to pick the rugs that will be worth fifty times what you paid for them thirty years from now. If you really know a lot about real estate and homes, then put your money in that. I knew a guy who was really an expert gemologist and he bought thousands of dollars worth of tanzanites when they first came on the market and nobody else realized what they were going to do. Unfortunately he passed away, but he knew it was going to happen and he wanted his family to be secure. They are millionaires now. If you don't know what I'm talking about with tanzanites, then precious stones are probably not what you want to put your own money into. :)

If you're really not up on any of this because you're a scientist, not an investment expert, then stick with mutual funds. You will have your diversification and you'll do just fine.

Other than that, it's sensible to buy a house as early in your life as possible. As Will Rogers said, "Buy land, they just ain't makin' any more of the stuff." It's quite likely that housing prices will rise faster than your salary. At least your house is the one asset you won't have to cash out, assuming you don't move around a lot, so it's somewhat recession-proof.

good post Fraggle Rocker - should help him (or her).

Iwill just add one thing about your interest (knowledge type, not monetary).

I was never very intrested in biological processes, but as I am getting older, even though in very good health, I have become more so. I have long been interested in financial investments. I have discovered one can often listen in, via internet, as various drug development companies report their latests results or brag at the web site how that have new "magic bullet" for cancers etc.

I love to learn so I have combined these two areas. I.e.although I knew little about basics biological processes at the cell level and lower, it has been both fascinating and profitable to dig deeply into this.

Pick some area you think is likely to be a growth area (lot of Baby Boomers are beginning to change their lives - obviously needing more medical care was a factor which made me interested in drug development ocompainies, inadition to my own aging.) But also as Faggle said, invest in something you know (or have time / interest to learn) better than the average Joe. If you do as I have done - go in some small companies early, be very sure to diversify well - some of my choice are worth half what I paid and others have tripled, one no longer exists as swallowed by another.