The Ideal Number Of Stocks You Should Own

“How many stocks should I own?” Whether you’re an avid investor or just got into the investing game, this is an important question that you’ll likely be asking yourself over and over again.

Depending on the type of stocks you invest in, the number of stocks you own can make or break your entire portfolio.

Individual investors vary across the board when it comes to how much risk they can handle.

For example, somebody straight out of high school without any debt will be able to tolerate more market risk and invest in different stocks (like growth stocks) than a retiree living on a fixed income.

The next thing you should consider is how much money you have to invest. If you’re Warren Buffett, you’ll certainly be making different investment decisions than if you have $100 to invest.

Typically, the trend is that the more money you have, the greater your “ideal number of stocks” is.

This is because when you have a small pool of capital, you can afford to chase higher returns by taking on more risk. When you grow your wealth to a sizable amount though, you’ll start to be more concerned about preserving your nest egg than the actual market returns year to year.

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