Question

What's the minimum number of stocks we need to make a portfolio fully diversified? A 5...

What's the minimum number of stocks we need to make a portfolio fully diversified?

A

5

B

15

C

30

D

80

E

500

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Answer #1

The correct answer should be 30

Diversification refers to allocating capital to different assets or securities so that the volatility of the market risk could be minimized. According to many research, 25-30 Stocks in a portfolio is must needed to fully diversify the portfolio, this is because you will need to invest in different type of securities which may belong to different categories like Industry that the company belongs, Risk rating of the securities, How good the company valuations are, and How much company can grow in the future etc.

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