Originally Posted by motor_oil_madman
What is long term? I've seen stocks selling for $100/share 20 years ago sitting at $12/share now.
Diversify! Back in the '80s, Canadians were restricted to 20% foreign content in their registered retirement funds, so people were always looking for workarounds. One mutual fund rep told me that I should put all of my money in NorTel stock. Although NT had manufacturing plants around the world, it qualified as 100% Canadian content. Said rep also told me that because NT was so diversified, it was like buying a diverse high-tech mutual fund, and that NT was such a good company, and so big, that it would continue to grow indefinitely.
Had I bought stock then, and sold it c. 1997, I'd be rich today. Had I bought stock then, and not sold it before the tech bubble burst c. 1998, I'd have lost it all.
Balancing the $100/share-20-years-ago stocks that are only $12 now, there is the opposite as well - $12 stocks in 2000 that are worth $100 now. Overall, the market does well for those who are diversified and patient.