Good article in Barron's on Mutual Fund Performance

LINK

Check out the article online or buy a copy of the paper this week.

They point out that very few actively managed mutual funds do better than passively managed index funds. The article speculates on whether this will change if interest rates rise.

Long story short---either buy index funds or do you own stock research.
I prefer the latter.

I don't buy the need for lots of diversification either. Oh I might agree somewhat in you should diversify across class of assets--real estate, stock, bonds, business etc--but in the stock market I don't care much for diversification. Buffet has said several times there is no reason to invest much in your second best idea.

I own four stocks right now.