6 Rules from World's Top Investors


3. Bill Gross

“Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count. Good [investment] ideas should not be diversified away into meaningless oblivion.”

Bill Gross is the Investing Officer of PIMCO. He manages the PIMCO Total Return Fund which is one of the largest bond funds in the world.

Mr. Gross’ rule talks about the portfolio management. A universal rule that most young investors know is varied form of not putting all the investing capital into one name. Diversification is a good thumb rule but it also lessens your profits when one of your investments makes profit while others don’t. Making money and profiting in the market is also about taking risks based on thorough research. You should always keep some cash in your account for those profit making prospects that need a little more capital and by this step you need not be afraid to act when you believe that your research is heading towards the right direction.