Based on your financial expertise, provide your response or viewpoint on the given financial question or topic. The response format is open.

For young (lower-mid class) investors what percentage should be in individual stocks?
The short answer: zero. dg99's answer gives some good reasons why.  You will basically never be able to achieve diversification with individual stocks that is anywhere close to what you can get with mutual funds.  Owning individual stocks exposes you to much greater risk in that random one-off events that happen to affect one of the companies you own can have a disproportionate effect on your assets.  (For instance, some sort of scandal involving a particular company can cause its stock to tank.) There are only two reasons I can see to invest in individual stocks: a. You have some unique opportunity to acquire stock that other people might not be able to get (or get at that price).  This can be the case if you work for a privately-held company that allows you to buy stock (or options), or allows you to participate in its IPO.  Even then, you should not go too crazy, since having too much stock in the company you work for can double your pain if the company falls on hard times (you may lose your job and your investment). b. For fun.  If you like tracking stocks and trying to beat the market, you may want to test your skills at this by using a small proportion of your investable cash (no more than 10%).  In this case you're not so much hoping to increase your returns as to just enjoy investing more.  This can also have a psychological benefit in that it allows you to "blow off steam" and indulge your desire to make decisions, while allowing your passive investments (index funds) to shoulder the load of actually gaining value.