The variation in the rate of return one can expect from ownership of stocks will generally be smaller
X if the funds are invested for a relatively short
period of time.
• if all of the funds are invested in a single stock.
• if a diverse set of stocks is held over a lengthy
period of time, such as 30 or 40 years.
• if all of the funds are invested in a specific sector of
the economy such as health care.