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/biz/ - Business & Finance

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500825 No.500825 [Reply] [Original]

>Having less than 30 stocks in your portfolio

Shit /biz/ do you even diversify?

>pic related: Your portfolio is trash now

>> No.500835
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500835

Having more than 30 is also equally a waste of time if you are only doing it for diversities sake.

>> No.500843

>>500835
where's that graph from?

>> No.500847

>>500835
The Elton Gruber study only goes so far. Their methodology was to select random positions from 3,300 securities, with no regard to cap weighting or sector selection. Even the lazy 3 fund portfolio invests across thousands of stocks through the ETF's holdings. You will need at least 30 stocks if you try to select the best of breed (3 each from 10 sectors) from the S&P 500, and that is just for US large caps.

>> No.500848
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500848

>implying I don't have hundreds through funds

>> No.500852
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500852

>>500848
Shit sorry man

>> No.500853

>>500843
>>500847
Just look at the S&P 500 vs 200 vs 50 etc., they hardly track any differently and generally follow the same trends long term, so yeah. Lots of stocks is fine but after a certain point you're not protecting your overall portfolio any longer from market shifts.

>> No.500854

>>500825
>thinking buying multiple stocks makes you diversified
bro I own like a thousand different pigs, no way I can lose

>> No.500867

VTI
boom I'm diversified
>inb4 but muh global diversification
>that's one more stock I can't remember the name of

>> No.501311

>>500825
The S&P 500, 200, 50 all track the same asset class; US Large Caps. There are at least 10 equity asset classes with various combinations of Large, small and mid cap, growth and value, domestic, international and emerging markets, and of course REIT's. Picking one from each is a dicey proposition. We haven't even mentioned fixed income.

OP's post is aimed at folks who's "portfolio" consists of:
GOOG
AAPL
AMNZ
TSLA
and a pot stock or two