Stock Pairs Portfolio

Diversifying your stock portfolio is a prudent approach to long-term investing. Owning too few stocks sets up the possibility of a financial melt down if one or more stocks goes down for a long time.

One easy way to diversify your portfolio is to select two like stocks from the same industry. Hopefully the chances of two similar companies going bad is less than one stock going bad. The pairs approach is a simple way to guard against a one-stock disaster. Of course if the entire industry goes out of favor, then both stocks will probably suffer.

Here are a five stock pairs of well known companies.

Updated June 30, 2007.

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