Young Ones, Go Forth and Speculate

This is why we have to throw the rules away and take our chances speculating, and my example gives you a much better return than you would be likely to get following the strategy that Clements advocates.

If you keep 40% of your portfolio in bonds and you still manage to produce a 20% return consistently, you ought to be a professional. That advice is good for someone who's middle-aged and has some money in the bank. But this strategy is totally counterproductive for anyone under 30 and hoping to turn a little into a lot.

Clements says your first priority should be diversification. I say don't worry about diversification. Jim Cramer, my boss at "Mad Money," will probably make me cry for saying that. If you're thinking of writing me an email to tell me what an idiot I am, know that Jim's already got that covered.

Diversification is essential when you've got enough money to put together a real portfolio. But until you have at least $10,000 in the market, I believe that it's a waste of time. You diversify your holdings because you don't want every stock in your portfolio to get wiped out at the same time. It's the key to capital preservation, but you probably don't have enough dough in your 20s to be worried about capital preservation.