Hmm. I guess lawyers do make a lot of money.

Yesterday morning, Judge Samuel Alito, nominee for the soon-to-be-vacant chair on the Supreme Court currently occupied by Justice Sandra Day O'Connor, filed a full disclosure of his financial holdings with the Senate Judiciary Committee ($850,000 in all). While some stock-watchers might be tempted to use this list of five stocks and 10 mutual funds as a "list of winners," though, I think the list actually provides lessons of a different kind.

Let's take a quick stroll through the good judge's portfolio and see what's there to learn, shall we?

First up: funds. Judge Alito owns a lot of them, and displays a marked preference for the low-fee offerings from Vanguard, with his top five holdings being: Vanguard's Wellington (FUND:VWELX), Small Cap Index (FUND:NAESX), Intermediate Term Tax Exempt, Total Stock Market Index (FUND:VTSMX), and a double helping of one of the funds recommended by our very own Motley Fool Champion Funds -- Windsor II (FUND:VWNFX).

Which makes our first lesson obvious: diversify. Judge Alito knows that one of the best ways to protect a portfolio from sharp jolts in value is to spread your loot amongst many holdings. When some go down, others go up, providing ballast to smooth the stock market's historical ride upwards.

Second lesson: Don't go crazy with diversification. Here's a lesson that I'd say his portfolio suggests that Judge Alito needs to learn, as opposed to one it can teach us. Do you really need to own 10 different funds, each representing holdings in dozens to hundreds of individual stocks, to get adequate diversification? I think not. In all honesty, Judge Alito could probably do quite well by owning just Vanguard's Total Stock Market Index fund, perhaps juicing his returns with a bit of Small Cap Index or, even better, the one fund he owns that bears the seal of approval from former Morningstar analyst and now head of Champion Funds, Shannon Zimmerman -- Windsor II.

Final lesson: Have some fun. While keeping the bulk of his money in inherently diversified fund investments, Judge Alito also takes a walk on the wild side from time to time, investing in individual stocks the likes of ExxonMobil (NYSE:XOM), Intel (NYSE:INTC), and Disney (NYSE:DIS). It's the very essence of the Fool's own "Index Plus a Few" strategy. Keep the bulk of your assets in diversified funds with low expense ratios, guaranteed to at least pace the market. But when the urge strikes, don't be afraid to spend a few bucks on the company of your fancy, secure in the knowledge that most of your wealth is safe from any mistakes you might make.

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Fool contributor Rich Smith has no interest in any company or fund named above.