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No. of Recommendations: 15
There's no hard-set rule as to how much diversity you need. Some people say that if you are investing in an index fund on top of your drips, the index fund should give you all of the diversification you need.

I have an index fund on top of my drips, but my drip portfolio will still be fairly diverse when I'm finished--it's just that I don't see a need to have at least one stock in every sector for my drips, though.

When I think of industries/sectors or companies to invest in, I try to picture in my mind where that industry may be headed in the next 20-30 years (my time horizon) and what the demand for that industry/company's products may be.

For example, no matter how the economy is doing, people will always need to buy drugs/pharmaceuticals. And as people get older, they're only going to need to buy even more drugs! So owning stocks in pharmaceutical companies is probably a good bet. Same with food companies--no matter how bad the economy gets, people will always need to buy food.

myadidas
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