How many shares should I have in my portfolio?
Hi everyone, I'm wondering what the perfect number of stocks is for a portfolio. Sure, the more stocks, the less risk, but where is the sweet spot? ETFs sometimes have more than 100 stocks in their portfolio, so I think that's too many. But are 5-10 stocks too few?
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Only a few shares are too risky, because if a share goes against 0 (lead, balance sheet scandal, etc.) you quickly lose 20 or 30% of your total capital.
However, 50 shares are too many, because on the one hand you cannot keep in mind all companies, and on the other hand, the number of shares would make an ETF more sensitive.
A good number seems to be between 10 and 25 shares.
You can google for "investment legend Andrew Brenton". In the post of insider shares, it was once described with which simple 4-step plan he could find relatively easily very good shares, and at the same time minimized the risk.
He has managed to achieve more than 20% returns every year for over 20 years.
You have to answer the question yourself, using your strategy on the market.
Consider what the goal of your investment is, how high your share ratio should be, what risk you want to bear, how risky and crisis-proof your portfolio should be, what investment horizon you have, what investment volume you have, whether you want to buy regularly, etc.
This is the only way to develop a strategy and build a portfolio on these issues. Only buying any shares and then considering how to trade will not work. Not in times of crisis.
But before you buy tens of individual shares, consider whether you cannot trade them with a product bundled with an ETF.
100 can be too little if incorrectly diversified (although the chance is smaller at 100).
10 can be good if they are properly diversified.
I always buy 100 shares if the value of the individual shares does not exceed €30. I'm less expensive. If the price rises by at least 10%, I sell half. So I have 10% profit before tax and thus a small buffer if the share falls
If the contribution should be serious, it is a very wise and unequivocal "strategy".
What role does the value of a single share play?
What volume does such a portfolio have to have so that it is not eaten by fees?
Why 100 shares instead of an ETF?
Why should a course movement decide alone whether a decision is taken to act?
Questions about questions. I guess.
Hello, Marc, right, is a bad strategy. Of course, I'm dealing with shares every day. If you want to create money and not “care” your depo, then a savings plan on one or more ETFs is certainly more sensitive. best regards