Twenty-Six-Year-Old Lisa Lamont Became an Investor One Day After a Friend

Twenty-six-year-old Lisa Lamont became an investor one day after a friend explained that there was a much better way to make her money work for her than by letting it sit in a savings account earning a very low rate of interest. Lisa decided to withdraw $10,000 from her savings account and invest it in stocks. She wanted to invest it in such a way as to minimize her risk. Which one of the following strategies makes the most sense for a new investor like Lisa?

A) Invest all $10,000 in a small fast-growing computer company.
B) Invest $5,000 in a gold mining company and $5,000 in a silver mine.
C) Invest the $10,000 in four different home builders.
D) Invest $10,000 in ten different oil companies.
E) Invest $10,000 in a large-cap mutual fund.