Jake Berzon

Top Brand Names and Stock Returns

First of all, a novice (or any other) investors would have had a hard time knowing in 2000 what Business Week will rate to be a top brand in 2008.

Furthermore, very few investors (not even psychic ones) can efficiently directly diversify into a portfolio of 100 equities. This is especially true of self-directed novices.

Thus, by following the simplistic advice of investing "in the brands you know and love," an amateur is more likely to loose virtually everything with companies like Citibank - a declining brand over this time period, than to gain with the likes of Google - hardly a household name in 2000.