No. of Recommendations: 2
galeno mentioned:
I use 30 stocks in my FIRE port because I've have conflicting opinions on this important question. WEB says 5 to 8 well chosen stocks. TMF seems to like concentrated portfolios of 5 to 15 stocks. Others say 20 stocks. And still others like 30. Mark Hulbert (see article below) and two finance professors I know and respect (Newbould and Poon of UNLV) say 50 stocks is what you need--maybe more if you own small cap stocks.



WEB's advice in no way applied to a portfolio which was to be used for income/sales of principal during retirement. His example was formed to illustrate his belief that there sre some drawbacks to over-diversification...and that if people picked their stocks as carefully as they picked their other major purchases, they'd be better off. Portfolio volatility is something WEB would gladly trade off for a L/T pickup in total return. People living off a retirement pile (for the mostpart) would trade off total return for a smoother and safer ride.

So if you were talking about a L/T portfolio that a 25-30yr old would hold and add to... and retire on in 25 years, then perhaps WEB's advice applies. But it is useless for someone who "just has enough" to retire "safely."



Euro [disclosure - largest single equity position (about 4x any other) is BRK. I'm living off my investments now and own about 45 stocks, among which 15-20 are REITs. With a smaller portfolio I'd have used Vanguard funds, but my fees/costs are less owning individual stocks...even at Schwab.]

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