About 10-15 stocks may help you achieve adequate diversification, says Dhirendra Kumar
What's the maximum number of stocks that should be in my portfolio? I want to make an investment of Rs 5 lakh for a period of 10 years?
- Sudhakara Reddy Vinta
There isn't a straight answer to this question. But I would say that if you are investing in stocks yourself, just make sure that you have adequate portfolio diversification but do not over-diversify. In my opinion, about 10-15 stocks would be sufficient to achieve this.
Also, having a portfolio of 10-15 stocks is good enough for you to remain interested in your portfolio because stock investing is a very sophisticated exercise. When you invest in a good company with a long-term investing horizon (which you definitely have), you have to keep an eye on it, as you can't really make an investment and sleep over it. So, consider reviewing your investments over six months by looking at individual companies and related news items.
To summarise, 10-15 stocks is good enough. But just make sure to invest with an openness of keeping an eye and changing your mind.