This books is really shaping up to be something that is good for novices and the experts. Today I will talk about six very basic principles of portfolio construction. It is actually quite humbling that my own portfolio does not make the cut for all of these principles. a) Diversification The first principle is to diversify your portfolio. This is the only known free lunch in finance. This is best done across asset classes and industries. For folks like me who focus on dividend yields, it is much harder to conform to these principles. I normally look at REITs, business trusts and high yielding equity counters to get the job done. Ideally, you have to throw in annuities and some high yielding bonds into that mix. b) Have position limits.  You can have too much of a good thing. Always ensure that no matter how attractive an investment is, ......