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Author: footchester Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 847  
Subject: how many? Date: 3/24/2008 5:44 PM
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How do you make the determination that you have enough different stocks (and/or funds)? Every time that the cash account in my 401k reaches $5k, I can buy another great stock, but I don’t want to end up with a hundred stocks whose returns end up approximating an index fund. (there are much easier ways to achieve the same results.)

I’m actually satisfied with my mutual fund portfolio. I own the exact funds that I want to own spread across a variety of sectors / types. Some funds are receiving ongoing contributions from my current 401k plan while others (in my IRA) only receive dividend reinvestment or lump sum contributions if I have the cash for an annual IRA contribution.

But I’m confused about where to draw the line with stocks. On one hand, I don’t want to end up with a virtual index fund. With a dozen stocks so far, I don’t believe I’m there yet, but is there any method of determining when you should stop buying more companies? (and instead just add more shares to the existing holdings)

I realize that there is no ‘rule’ for this, but I’m curious how other people make this determination.
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