Subject: How and why to diversify your investments

From: Schwab May eBulletin <[email-masked]>
Date: Tue, 09 May 2006 19:08:46 -0700 (PDT)

Charles Schwab and Co., Inc.
eBulletin
May 2006
A Monthly Newsletter for Schwab Independent Investors 

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Feature Story

The Portfolio Pyramid: How to Diversify Your Investments
By Bryan Olson, CFA, Vice President, Schwab Center for 
Investment Research(R)

Remember the food pyramid for building a balanced diet? The
portfolio pyramid covers the essential elements of a healthy,
balanced portfolio.

The portfolio pyramid is a way of looking at your portfolio to
determine if it's truly diversified both across and within asset
classes. As you will see, the pyramid breaks down a portfolio
into manageable layers, making it easy to uncover any unhealthy
symptoms. Here, we'll primarily go through the side of the
pyramid that has to do with stocks, though the bond side is just
as important.

Read more
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Quick, easy steps to a broadly diversified portfolio
 
If you want to keep your portfolio well diversified but don't
have time to evaluate individual stocks, bonds and mutual funds,
we can help. Our Portfolio Solutions cover the spectrum of risk
by combining different asset classes: large-cap and small-cap
U.S. stocks, international stocks, bonds and cash. In a few steps,
you can have a professionally managed, broadly diversified
portfolio designed with your goals in mind -- without loads or
transaction fees.

Learn More
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Diversify with Exchange Trade Funds

Exchange-Traded Funds (ETFs) provide a smart, low-cost way to
diversify your portfolio. A class of index funds, ETFs are
quickly gaining popularity because they offer the diversification
of a mutual fund with the trading flexibility of a stock.
In fact, ETFs can be bought or sold throughout the market day,
and expose your portfolio to market, industry, sector, and asset
indices. Visit our new ETF Center for details.

Learn More
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Stay on top of your portfolio with investment alerts

Staying on top of your portfolio requires timely, actionable
information. With Personal Investment Alerts you can customize
the information you want to track, and get automatic updates on
your holdings. While regular stock alerts tell you what's up or
down, ours actually tell you what you could be doing about it.
For instance, the Schwab Equity Ratings(R) downgrade alert sends
you an email when the rating on a stock you're tracking is
downgraded -- so you can make better buy, hold and sell decisions.

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Charles Schwab Bank Offer

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Investor Highlights

International stocks: a core element of a diversified portfolio

International stocks represent a key component of any diversified
portfolio. And the international small/mid-cap sector has
outperformed both the broader international market and the
large-cap U.S. market over the past 1-, 3-, 5- and 10-year
periods. Of course, there are risks associated with investing in
foreign companies, such as erratic market conditions, economic
and political instability, and fluctuations in currency and
exchange rates. Investing in emerging markets accentuates these
risks. Now you can diversify your portfolio with these hard to
find small/mid-cap international companies with the new Laudus
Rosenberg International Discovery Fund. Don't miss our exclusive
offer -- place your order by May 30, 2006, and receive
the subscription price of $10 per share.

Learn more
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Charles Schwab Bank Offer
You could save up to 0.25% off your mortgage loan rate.
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