Although that answer will be different for every investor, the benefits of diversification level off when there are more than ten stocks in a portfolio. Take a look at this diagram:
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Tuesday, March 17, 2009
Evaluating Investments - Question 9
You mentioned the need to be diversified in order to minimize risk. Wow many stocks do I need to own to achieve diversity?
Although that answer will be different for every investor, the benefits of diversification level off when there are more than ten stocks in a portfolio. Take a look at this diagram:
Although that answer will be different for every investor, the benefits of diversification level off when there are more than ten stocks in a portfolio. Take a look at this diagram:
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