Diversify
Diversification is critical to ensuring your financial security. After doing all your research and picking your investments there are still threats to your financial security. Executives lie, lawyers sue, the government regulates and disasters strike. There are many forces that you can't avoid with research. Diversification offers us a defense against the unexpected.
Diversification means distributing your funds among investments with different characteristics. How does this help? In the event that disaster strike diversification helps to limit your losses.
There are many different aspects of diversification you should consider.
Industry diversification - If I invest in Intel and AMD I've chosen two different stock but there are many cases where the stocks will react the same. In this case perhaps a totally new computer technology that renders both companies useless. I avoid having more than 20% of my funds in any one industry.
Investment class diversification - All too often people have a majority of their net worth in the equity of their home.
Job diversification – Be very careful investing in the company you work in. There are many good reasons to invest in the stock of your employer, but you need to strictly limit these investments. If your company experience problems you could lose your job and your investment.
Size diversification – There is a tendency (much less than for a stock's industry) for stock of the same size to trade together.
Diversification is not much more than common sense, "Don't put all your eggs in one basket." But you ignore this principle at your peril. If you aren't diversified a single unexpected event can wipe out all your hard work. Luckily it is both inexpensive and easy to diversify.
Good luck,
Scott