So you didn't diversify did you? When the stock market tanked today after a lovely 370 point loss, you were the one standing around crying like a little girl and whining "Oh Man - What do I get the wife for Valentine's day now?

Those of us who took 2 minutes to plan ahead were not that worried about it. Sure we lost a few bucks in the old stock portfolio, but at least we didn't have 1000 shares of Your-A-Stooge.com (ticker symbol: UASS) go from 20 bucks to 2 bucks in 1 day.

Was this you? If so, its your lucky day so listen up!

Having a balanced, or diversified, portfolio is the key to long term investing. Plus, it might actually allow you to sleep at night because you don't have to worry about one bad earnings report causing you a 20% loss in your portfolio in less than 5 minutes.

Don't believe me? Ask all of the poor saps that got nailed during the Dot.com bubble collapse from 2000 to 2002. Dot.com was there after known as the Dot Bomb experience.

Basic Portfolio Setup

Determine how much money you can afford to save each month, or each pay period. Even if it's only $50 bucks, save it anyway. Keep saving until you have a few hundred bucks.

After looking through a wide selection of companies you believe will make a good investment. Then, speak with an investment professional or a trusted friend who is a knowledgeable investor. Ask him/her if they agree with your selections, and answer their questions. If you get desperate, just leave a comment and I will point you in the right direction.

Now that the hard part is complete, jump online and find an online broker that has low trading fees and a solid reputation. My recommendation is one by the name of Zecco.com, because not only is it a safe site to manage your investments, but it's free to make 10 trades each month if your account balance is over $2,500.

Even if don't have $2,500 in your stock account, don't worry because the trades are only $4.50 per trade. This definitely puts brokers like E-Trade or TD Ameritrade to shame because the everyday investor buying 10 shares of Company X saves a few bucks.

This should, at the very least, get you started on your journey. However, lets talk briefly about the types of companies you would like to buy as investments.

Do you want a company that grows quickly, or a larger company that has proven its dominance after many years of being in business? Do you want safe investments that have a large degree of volatility or a slow and steady type of investment?

All of these are valid questions and should be thought upon before rushing buy anything. Here is an example of a model portfolio, and the types of markets they belong (I will choose only 5 stocks just as an example).

1. Wal Mart - sells retail goods of nearly everything imaginable!
2. Merck - sells different types of medicine and vaccines.
3. Microsoft - computer software and internet advertising.
4. Exxon Mobil - sells the gas you put in your car.
5. Bank of America - holds your money to gain interest while giving them liquidity and cash flow

A professionally generated portfolio will look similar to this one, but will contain many more stocks covering different sectors of the investing world. These five picks illustrate that one stock losing a large percentage of its value is not a deathblow to your stock portfolio's value because it will be cushioned by the remaining four stocks.

Again, if questions arise, please just let me know. I do this professionally, so I can lend guidance if requested.

Disclaimer: Author has does not own any of the stocks mentioned in this article.