NEW YORK ( TheStreet) -- In part one of this article we talked about the importance of keeping investment decisions focused on the bottom line and less on the "rules of investing" -- the myths that serve to only qualify your status as an investor while yielding very little results.One such myth: beating the market requires that one diversifies his or her portfolio. This is simply not true. While it supports another fundamental principle that reminds us don't put all of your eggs in one basket, it makes me question the logic of purposely devaluing your own money.
Next, let's look at Bank of America. Assuming that you perfectly timed the bottom in 2009, a $2,000 investment would have awarded you 666 shares. This year, the stock reached as high as $10.10 which would have represented a gain of $4,728.60. While it's nothing to write home about, it's a decent gain nonetheless. As for the $1,000 that was sitting in cash at .5% over the past three years, you would have been lucky to have made $100; however, if you factor in inflation and the rising costs of living, it would have actually declined in value. But, for the sake of argument, let's say you broke even. So as it stands, along with your $1,000 in cash, your Apple investment yielded gains of $24,376 and Ford, profited you $13,000, while your BofA holdings netted a return of $4,728.60. Did you come out ahead? That answer would be no. So basically, in your attempt to play it safe and following Wall Street's rules, your diversified portfolio of $10,000 would be worth today a grand total of $43,104.60. Impressed? Perhaps, but whereas, had you ignored the myth and placed your entire bet on Apple your initial $10,000 investment would have provided an additional return of $17,895.40. In other words, your need to sleep better at night only requires that you work harder during the day. What's the point?