How Many Stocks Should I Own?
Many value investors recommend 5-8 stocks; 10 at the most. What about diversification? The reason for such a low amount of stocks is that you need to make good decisions. How can you make great decisions with 100 stocks in your portfolio. It is way too much to keep your mind around. If you know what you are doing, pick a few good stocks and stick with them unless a fundamental thing changes about the company. Don't sell just because a stock went down or up.
If you don't know what you are doing, then buy lost of stuff on diversification. On second thought, if you don't know what you are doing, you should definitely buy a low cost index fund.
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