A subscriber recently wrote to me asking me to suggest five stocks from the InsideArbitrage model portfolio that I liked best so that he could start a new portfolio consisting of these stocks. Since I am not a registered investment advisor (RIA), I cannot legally offer individual investment advice and even RIAs cannot offer investment advice to individuals by email unless they already have an existing relationship with them.
This makes a lot of sense, as each investor may have different goals and risk tolerance levels. While a high growth and very volatile stock like Suntech Power (STP) may hold a place in the portfolio of an investor with a long investing horizon, it may not be appropriate for an investor who has to withdraw funds in the near future to pay for a child’s education.