Brett Arends writes an interesting article, "Ten Stock-Market Myths That Just Won't Die" for the Wall Street Journal Digital Network. While I agree with nearly all of his ten points, there are a few that need further clarification. Point #8 focuses on diversification using mutual funds. I agree with that part of the point, but not the section quoted below.
"But too many brokers mean mutual funds with different names and "styles" like large-cap value, small-cap growth, midcap blend, international small-cap value, and so on. These are marketing gimmicks. There is, for example, no such thing as "midcap blend." These funds are typically 100% invested all the time, and all in stocks. In this global economy even "international" offers less diversification than it did, because everything's getting tied together." [Read more…]