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How many stocks do I need in my portfolio? |
I am in college and hold a steady job and contribute $332 a month to a roth ira. I am currently holding 7 stocks/ etf's in my portfolio. How many is a good number to have to be diversified? DBS and UNG would be alright but I want a natural resoures ETF that does not deal in just one resource but in many resources. Also UNG is fairly young and unproven. You are done. That's a very difficult question to answer, without knowing your risk tolerance, time you can dedicate to the market and stock picking skills. Modern portfolio theory generally says that 20 stocks are all you need to completely diversify Given that you already have ETF's that have hundreds of stocks, you are diversified from a sector perspective. I personally think that 8 stocks that you know well and are willing to take a big position is all you need. tba DBS and UNG should do the trick for you being silver and natural gas ETFs. Also I would recommend selling the DIA and PEP, as will be under-performers unless you buy as far out as you can At-The-Money LEAP calls on them to increase leverage and your risk. The first two are much better choices and would recommend the LEAP calls on them also to increase great investments into eye popping returns for you. Your port is already diversified because an ETF represents lots of different stocks. Its like a low cost mutual fund. |
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