I'd say it depends on your profile as an investor, as well as your goal :
- You want to put your savings somewhere else than in the bank so you can have better profit on it, while increasing the risk as less as possible ? => diversify
- You want to try to earn good money via altcoins and those 500$ are what you're willing to loose and you consider it as "part of the game", quite like playing poker. In order to earn more, you are willing to go all-in and perhaps loose those 500$ => choose one of the coins that have the most potential and invest the 500$. Choose a goal (x1,7 ; x2 ; x3,...), write it down and STICK TO IT. Sell half of it/all of it, when it reaches that price and invest in 2/3 other coins with your gains.
- You have 500$ right now but want to inject more in the following months (like me)-> choose one or two coins for now and diversify as soon as you inject more.

In any case, always do researchs on the coin(s) before investing. Be critic.