How Many Stocks Should You Have In Your Portfolio

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The eternal question is how many stocks should one have in his portfolio. The answer is pretty easy, the more you know the lower should be the number of stocks in your portfolio while if you know little or nothing you should go for more diversification. I discuss some research that show how adding more stocks increases your number of losing stocks and discuss how the modern portfolio theory approaches the issue. Buffett would say that diversification is protection from ignorance.

[InnerWorldDiscovery]

Sven
You are a real treasure !
I recognize your depth of understanding ( PhD and street smarts) and
Your enthusiasm .
amongst all the noise on utube you are simply -Gold!

Thank you so much
Phillip Silverstein M.D.

[pongop]

Thanks for the video. You were right. I have way too many stocks, and I am underperforming the market. I was going for a core-satellite strategy, and also for diversification. I have exposure to almost everything. Then I added stuff to help me outperform the market. I think I have diworseification. But it helps me see what does well, what doesnt, and how the assets perform in different environments. I can research and focus on the better ones over time.

[kevin]

I think the minimum is the elbows (7 stock), but for experts. A more common position may be 10 for less experience and maybe more for older people.

[potatofrogs]

I have currently 7 stocks in my Portfolio which I start creating in early May 2019:
Bigben Interactive 17, 28% (my favorite stock)
Century Link 14, 63%
Japan Tobacco 12, 93%
BAT 12, 46%
Vedanta 11, 85%
KraftHeinz 11, 6%
Qudian 7, 48%
The rest are global ETFs.

[garrisonsimon]

I have 2 different accounts. A retirement account with mostly Berkshire Hathaway with a little AAPL, GOOGL, and AMZN added in there.

In my main account which I trade more actively I have 5 stocks. This is probably one of your best videos yet!

[Viperever]

I created two portfolios to satisfy both my investment urges. One very concentrated portfolio of 5 stocks to practice my stock picking and chart reading skills and another 22 stock growth-income portfolio invested in strong cash cow companies with competitive advantages. The income portfolio is yielding around 3.3%, however, its total return has underperformed the market.

[martinmaas]

Hi Sven! I've been following your "lectures" for the past weeks ;-). I have 4 stocks. I'm trying to diversify a little more, as one of the stocks (Vale) depends on the price of a single commodity (iron ore), and the futures market of that commodity is just very volatile. A change of 10-20% in the commodity price gets me rather nervous, however, similar changes in the stock price, not so badly.

[igorfeldman]

If you had to come up with a series of ideas about anything, how good would your 8th? 9th? 10th idea be really? I would go with your best several.. max 10. I think its impossible to have 37 good ideas.

[TheMpamMpam]

I usually try to have min 5 and Max 10. I think that if I have a lot I tend to lose my focus and ability to do the proper research required.

[SpiritLeash]

Very good video. Thanks for sharing the main ideas, very valuable. I hold exactly 20 stocks.

[dynamo]

in my 401k im like 90 percent berkshire and 10 percent short term bonds. in the future i might buy different ones but i feel like that's the only no brainer stock out there atm. anything else will take more research. i like ADM too but it seems to be trading too high atm

[smrutiranjanbiswal]

I am from India..
I am holding 40 stock, (25 Lakh)..I want to reduce the no of stock..how to do that ???

[jay_murs]

I have 3 at the moment, with 2 on the list to add in the future.
Request:
Could you explain how Warren Buffett uses options to gain a stock position with companies he's interested in?

[colinburnside]

Sovereign wealth bonds have been a hedge for hundreds of years but the primary source is income . On the Global financial Market. Cheep to buy and
and cheep to sell .

[aviadd]

I'm pretty interested simply for research what those 6.1% companies that outdid the market were. Also Seven, why did you show the specific years of '83 till '06 and not something a bit more updated? Did the statistics show anything different for the past 10 years from what the Russel Index chart shows?

Thanks as usual my friend, your daily contribution is my university course.

[davidmostl]

Amazing and very important video! Greetings from austria

[thomas]

I just started my portfolio in august and got lots to learn. Your talks along with The Intelligent Investor are helping alot. I currently have 6 stocks was planing to add around 3 more so this helps see why. Im watching (NSU) but not sure the best time to get in is.Im thinking about a copper/electric car play for awhile.Im new at this so Thanks again.

[patrickbutterly]

Hey Sven, I currently hold 15 stocks in my portfolio. My largest holdings is Geely automotive

[ravennl]

As you already know I have been looking a lot into dividendstocks. My total amount of stocks is going to be somewhere around 14 in april. I have been looking into the French company of Engie as I am diversifying away from the USD as well.

After that I am going to see what is going on in Scandinavia. And if the world didn't collapse then I'll look at some banks as a even more diversification.

After all this my focus will be even more on my dividend companies and adding to position I already own.

[scottscriticalmass]

Hi Sven - Another good video, thank you!  I break up my stock investments via the following. I break my holdings up between a few ETFs (Dividend Growth, International Developed Markets (meaning non-U.S. for me), Emerging Markets) for a total ETF allocation of about 25% and then individual stocks which I target 6%, 4% and 2% for each individual holding depending on my confidence in position.  I keep it simple, highest conviction (6%), higher conviction (4%) and high conviction (2%).  No need in investing in anything lower than that.  :)

I look for long term trends and focus on leaders and an 'up and comer' or two in those industries, usually buying a bucket of those companies to increase my chances of hitting on the winner(s) (ex: V, MA, AXP, SQ in digital payments).  I also dedicate a portion of my portfolio to companies that are leaders in their industry that I feel have depressed stock prices, but a fixable business (recent examples: GILD, DIS, SRCL, RHHBY and a couple U.S. retailers).  I then allocate a portion to highly speculative companies, which I'm going for the home run on.  Good areas for me have been healthcare/biotech and tech/software.  And finally, I like to own leaders in growing industries, stay patient and hold until they start to lose their leadership positions (ex: SBUX, AAPL, CRM).  

All in all, I typically hold 25-30 individual stocks which in all honesty is more than I prefer, but as my portfolio has grown I've been hesitant to allocate larger percentages to any single stock. My ideology is changing and my goal is to reduce to 15-20 initially and hopefully 10-15 over time.  

Sven - I agree with your premise that the more holdings you have increases your chance of holding losers, since 63% of stocks underperform. So with that said, I'm in the midst of selling off some positions where my opinion has changed, which just happens to coincide with my belief the U.S. markets are due for a 10%-20% drop in the coming 6-12 months. Just my $0.02 and it's impossible to consistently time markets, although you can get lucky from time to time.