- Research suggests owning at least 12-18 stocks provides enough diversification.
- Owning more stocks will often lessen portfolio volatility whereas owning fewer stocks will increase portfolio volatility (relative to the overall market).
- You may want to allocate more stocks to your high-risk strategies and fewer stocks to your low-risk strategies.
- Don’t buy stocks you haven’t researched or don’t believe in just to reach a goal of a certain portfolio size. Always aim to own the best stocks in the market.
When it comes to how many stocks you should buy in your portfolio, there’s no “one size fits all” answer.
The right number of stocks to own is different for every investor.
That being said, most investors aim to own somewhere between 10-30 stocks in their portfolio.
In our experience, owning less than 10 stocks is too little diversity and too much risk concentrated on just a few positions.
And owning more than 30 stocks is almost too diversified (starting to look like an index fund) and too much work for the average investor to research and monitor over time.
So, in general, we recommend aiming to hold somewhere between 10-30 stocks in your portfolio. And, for most investors, owning 10-20 stocks works just fine.
Of course, there are exceptions. Here are two that come to mind…