A well-diversified portfolio needs about 20-25 stocks from different categories is this True or False?

Question

Alonzo Erickson

Computers & Technology

1 September, 11:32

A well-diversified portfolio needs about 20-25 stocks from different categories is this True or False?

+5

Answers (2)

Know the Answer?

Hazel Nunez · Answer 1

Usually they hold 15-20 as the minimum of the portfolios

So I would say True

Pepsi · Answer 2

The statement is true that well-diversified portfolio from different categories which needs about 20-25 stocks.

Explanation:

In United States, investors need about 20-30 stocks from different categories for a well-diversified portfolio. For this to be easy enough, index funds and ETFs provide quick diversification across different market groups as these allow us to purchase many stocks within single transaction. More than the number of stocks, number of well performing industries really matter.

Diversification across the industry sectors will serve the purpose of investing. With diversification, the systematic risks can be outgrown. For potential higher returns and systematic risks need to be accepted.