I have been thinking of investing again (current holdings are three individual stocks and an IRA at Charles Schwab) and was trying to decide how to allocate my portfolio (that really makes it seem like I have a lot more money in the market than I do) – the main way I do this is talk to my friends who are all full of common sense and love.

One of my friends was talking to me about this and I was trying to decide on investing in DIA (commonly known as “diamond” – an ETF Index fund that mirrors the Dow Jones Industrial stocks) or in SPY (commonly known as “spider” – also an ETF Index fund that mirrors the S&P 500 stocks) or if I should try and pick one or two individual companies.

Her response was the smartest thing I have ever heard someone say in finance conversations, “Well, isn’t picking one company sort of like betting against the house?”

Yes, my very smart and well-respected friend. Yes, it is.

Which is why I’m going to go for the DIA. I have an index fund in an IRA that is following the S&P 500 and it’s not doing great and hasn’t been doing great for a long time. Sure, that could just be crappy management of that particular fund – and probably is – but it’s left kind of a bad taste in my mouth for the S&P 500 in general.

Plus, I’m lazy.

I like the idea of being able to listen to the number given when people talk about “the stock market” and know how I’m doing. I use the little sidebar on my desktop to follow my stocks, but I’m not a short term investor so I don’t pay a whole lot of attention to them day-to-day. I did own Ford (F) until I doubled my investment then sold and went into Alcoa (AA) (an aluminum company) because, eventually, it’s going to go back up and is already higher than when I bought it.

I worry, though, because even though I’ve managed to double my money a couple times that doesn’t make me any kind of a stock-picking savant. I also avoid penny stocks and really volatile stocks because I don’t have the education or the desire to learn all the things you need to know in order to make really intelligent decisions.

Plus, then I remember in high school how stocks in my economics class picked via the “dartboard” method did better than the ones the class picked after doing detailed research. That’s when I understood it was a more sophisticated form of gambling, but still gambling…and that doesn’t sit well with me.

But if it’s gamble or accept the savings account rates I’m getting right now…I’ll take the gamble.

But I’ll do it as safely as possible. A diversified portfolio of stocks with most of my money going with the house. It’s the best I think I can do.

Disclaimer: Don’t take my opinion as a recommendation and ask a professional before making investing decisions. And stuff.

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