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A related blog post: "Why I don't trade stocks and (probably) neither should you" http://edmarkovich.blogspot.com/2013/12/why-i-dont-trade-stocks-and-probably.h

• loeg 6y ago
  And consider also, "The 15-Stock Diversification Myth," http://www.efficientfrontier.com/ef/900/15st.htm http://www.efficientfrontier.com/ef/900/15st.htm : > One of the most dangerous investment chestnuts is the idea that you can successfully diversify your portfolio with a relatively small number of stocks, the magic number usually being about 15. > … > The reason is simple: a grossly disproportionate fraction of the total return came from a very few "superstocks" like Dell Computer, which increased in value over 550 times. If you didn’t have one of the half-dozen or so of these in your portfolio, then you badly lagged the market.
  • clairity 6y ago
    there is a lower bound, but it's closer to 60, and those need to be picked carefully to avoid excess correlation. at that point, you might as well buy an index fund since you're unlikely to beat the market anyway.