In my dividend investing I focus a lot on diversification. Proper diversification means that an investor owns at least 30 individual stocks, representative of as many of the ten Standard and Poors sectors as possible. Proper diversification also means that investors do not simply purchase stocks in order to diversify their risk however. It means to invest in a diverse number of businesses with favorable economics, which are attractively priced and which also have bright long term prospects. Proper diversification will add an extra layer of protection for an investor’s portfolio when unforeseen events such as financial crises, oil spills and lawsuits affect otherwise stable and profitable dividend paying stocks.