How many stocks should one buy for stock trading?

MillionaireTiger
02-22

Welcome to Thursday Special!

When it comes to investing in stocks, the cornerstone is "certainty."

It may seem like the number of stocks you hold is closely related to how much capital you have. In reality, is that true?[Doubt]

Here is an interesting example:

Imagine you're absolutely certain your girlfriend will say yes to marrying you, and you love her dearly. The probability of her becoming your wife approaches 100%! [Applaud]

In such a scenario of "high probability of success," do you need to date others? It's not about how much money you have; it's about the certainty you have in your relationship.

  1. Some "experts" advise investors: If you have a small amount of capital, holding 2 or 3 stocks is sufficient, while those with over 5 million should hold 10 or more stocks.

  2. Other experts argue: Holding too many stocks can be overwhelming; 2 or 3 are enough for investors.

So, what's your take on this?

How many stocks do you typically hold?

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# How Many Stocks Should You Hold?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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Comment（22）

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  • Finarich
    ·02-23
    TOP
    Depends on your style! Day traders often focus on fewer, while long-term investors aim for diversity.
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  • DiAngel
    ·02-23
    TOP
    I hold more than 10 SG counters and more than 6 US counters. Diversification is the word. Unfortunately, during pandemic, no matter which sectors you are holding, you will be hit badly. Apparently, diversification is not applicable during the tough time. But gradually, you will see some sectors recover much faster than the others.


    This year, i m trying to venture into sectors that i have never thought of in the past. Maybe my main focus this year is dividends. [Bless][Bless][Bless][USD][USD][USD]. Thus, no venture no gains. I have a long horizon as i m a long term investor. [Smile]
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  • Kok
    ·02-23
    TOP
    I would suggest having at least 20 stocks, with each stock having an allocation of 5% for a start. If one of these companies go under, you won't lose more than 5% of your capital. Think about lasting the marathon first before you think about your first pot of gold.
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  • icycrystal
    ·02-26
    I think this will depend on the individual. if those individuals have more [USD] [USD] [USD] then perhaps can hold more stocks and etf. for those starting out, etf might be a good way to begin. of course holding more stocks may mean more time to manage and diversification is safer. otherwise, can go for auto-invest, rsp, etc, these features will help with managing the portfolio [smile] [smile] [smile]

    @DiAngel @Shyon @Aqa @GoodLife99 @Universe宇宙 @rL @LMSunshine @koolgal @HelenJanet

    How many stocks do you typically hold?


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    • Universe宇宙: 
      [ShakeHands]
      02-26
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    • Shyon: 
      I fully agree with your points of view
      02-26
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    • koolgal: 
      Thanks for sharing your valuable insights 😍😍😍
      02-26
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  • Shyon
    ·02-26
    Well, from my experience, the ideal case will be not holding too much stocks at one go, else it will mess up your portfolio. When everything is good and while market is in bull run, there is no any issue. However, once the market starts to crash and become bear, it will be challenging for you to clear up your portfolio. Firstly, it is due to there are too many stocks for you to monitor and react. Secondly, it's mental, when you saw 20-30 of your holdings are losing big, you will lost to the interest and choose not to face the reality by cutting loss and leave your holdings continue to bleed, hoping them to rebound asap. The lesson that I try to flow through is, it might affect your decision making when you are holding too many stocks.
    Last but not least, a general benchmark:

    10k fund : 2-3 stocks
    50k fund : 4-5 stocks
    100k fund : 6-7 stocks
    500k fund : Not more than 10 stocks

    Hope this helps guys, all the best!

    @TigerStars @CaptainTiger
    @koolgal @rL @icycrystal

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    • koolgalReplying toShyon: 
      Brilliant idea😍😍😍
      02-26
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    • ShyonReplying tokoolgal: 
      Let's learn daily from each other.
      02-26
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    • ShyonReplying toUniverse宇宙: 
      [Blush] [Blush] [Blush]
      02-26
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  • Aqa
    ·02-28
    Don’t concentrate all your money in just one stock is my opinion. The degree of diversification depends on your time available to monitor each individual stock and your time horizon.
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  • ECLC
    ·02-24
    Opinions from "experts" very varied; no sure win formula. Prefer having a few strong stocks with consistent dividend payouts; avoid "risky" stocks with likely sudden high gain / loss.
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  • Aqa
    ·02-23
    Serious portfolio management and over 10 stocks to minimize risk and maximize returns is needed for over 5 million. 2 or 3 stocks is suffice for small amount of capital. Experts’ advice is definitely correct!
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  • letsbefriends
    ·02-22
    This post is thought provoking! I think the right number depends on the covariances within the portfolio you hold - and perhaps the industries even. The goal is to smoothen the volatility for your set return, and this means to take advantage of correlations - you can drive down vol and keep returns constant. Pick the best avaible set that can achieve that, and this set affects the number of stocks you hold. But one thing: historical vol and covariances might trend different, so whether you want to build a bigger buffer is your call
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  • nandaa
    ·02-24
    I have my CN25 portfolio which is a selected of 25 counters in a diversified spread - Tech, Healthcare, Staples, crypto, cyber, solar, fintech
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  • MHh
    ·02-23
    No magic number. As long as can study and know them well and within risk appetite!
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  • nomadic_m
    ·02-24
    I guess I'm training to be a 5 millionaire 🤣
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  • Optionspuppy
    ·02-27
    100 to sell a put ! Optio.
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