Diversification with a retro look.

Investment News, January, 2001 by Benjamin Jeff

Let's start with the definition of diversification. In 1999, it meant sprinkling some biotechnology stocks in with a bunch of money-losing Internet startups that had catchy names and CEOs with spiked hair. Last year, diversification began to mean investing more in companies that were profitable and selling real products that people were actually buying.

More recently, diversification has been leading us back to the old standby of a tidy mix of stocks and bonds, both domestic and international.

It may not be quite as sexy as loading up on, say, CMGI Inc. back in January 1999 at $15 a share and watching it climb 967% in 12 months to $160. But, of course, CMGI, perhaps the epitome of that pesky dot-com bubble, is now trading at about $5. Ouch....