/biz/ - Business & Finance

>>12322856
>less than 50 stocks
>diversified
not quite

>>12089593
>puts
no, but randomized individual stocks is unironically a fantastic way to gain money long term

>>11662842
>>11662905
also once you have more stocks than the indexes do, you begin to see diminished returns

pic related, x-axis is number of stocks in randomized portfolio, y-axis is returns %

50-200 stocks seems to be the sweet spot

>>11380173
>>11380177
x is # of different stocks

>>10946470
>Historical performance has shown time and time again this isn't possible, index funds almost always outperform managed funds.
and randomly picked portfolios almost always outperform indexes too (yay random walk!)

indexes are not hard to beat

>>10939522
the reason is the statistical feature called "Random Walk"
and its not foolproof

>>10939565
after 250 different stocks it starts to backfire and cause negative (pic related)

that soesnt sound like a bad idea, but keep in mind that useless garbage can still have suprise spikes, just like how popular safe bets can still have suprise dips

>>10883543
actually the sweet spot is 50-100 stocks (pic related)

but since its a probability distribution that has a median higher than SP500 returns, there is a real chance that you can do worse
there is also a real chance that you could do insanely well too though

>>10883589
beating the sp500 is not a grand achievement, its like bragging because you can beat up a toddler