• Home
  • Contact Us
iBusiness Angel
No Result
View All Result
Sunday, May 28, 2023
  • Home
  • Finance
  • Accounting
  • Sales
  • Business
  • Marketing
  • Home
  • Finance
  • Accounting
  • Sales
  • Business
  • Marketing
No Result
View All Result
No Result
View All Result
Home Business

What is the ideal quantity of stocks an investor should get?

by Harold Washington
August 10, 2021
in Business
0
What is the ideal quantity of stocks an investor should get?
153
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter

How many stocks should I get?

If you ask how much stock is the best to get, you might never find an answer, let alone an accurate one. You might want to change your question. Instead, ask about the factors that affect the stocks in your portfolio. Investors should consider many factors such as the location and type of investment, the investment’s time horizon, market conditions, propensity for reading market news and being updated with the holdings. These considerations should go first before the investor can come up with the correct number of stocks.

Systematic and unsystematic risk

Most investors diversify their portfolios by choosing different investment vehicles because they want to avoid massive risk exposures. With that being said, they engage in unsystematic risk. It is a risk that is relative to a specific company or industry. If there is an unsystematic risk, we also have systematic risk. It is something that investors cannot diversify. Why? To explain this, let us cite an example. Some risks involve economic downturns that hurt the stock market.

A theory called “Modern Portfolio” says that it can avoid unsystematic risks if the portfolio is well-diversified. In fact, it can even help prevent these risks to a level as if they do not exist. All of this can be possible while expecting a return from a portfolio that has massive risk.

How about transaction costs?

An investor with more systematic risk for a potentially high return does not experience more return potential for unsystematic risk. More equities in your portfolio mean lesser unsystematic risk exposure. For instance, a portfolio that holds three stocks from the same industry is riskier than having 15 stocks from different sectors and industries.

But if owning more stocks from different sectors and industries is less risky, does that mean I should pay more transaction fees? The transaction fee is also something that an investor should consider because it can add up in the long run. So, there is a need to keep stocks at a minimum or a decent number. We cannot give an accurate number. However, we can say that the number of stocks that move around in the US freely is approximately 20 to 30. When commissions and costs were higher, a research states that a 20 to 30 range of stocks is a decent number for this question.

New studies are saying that an investor should take advantage of low transaction fees from online brokers. There is no exact number, but they suggest that holding more or less 50 stocks will be good for a portfolio. However, let us not forget that these stock market facts that we have in the past and today may not be the same in the following decades.

At the end of the day

Most investors would keep 15 to 20 stocks as a minimum. Some investors who do not want to do extensive research may turn to index funds and ETFs to diversify their portfolios easily and quickly. These are investment vehicles that allow an investor to buy a basket of stocks in a single transaction. 

Harold Washington
Harold Washington
No Result
View All Result

Archives

  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019

Categories

  • Accounting
  • Auto
  • Business
  • Coworking space
  • Featured
  • Finance
  • Human Resource
  • Industrial Fume Extractors
  • Industry
  • Investment
  • Laboratory
  • Law
  • Legal
  • Marketing
  • Real Estate
  • Sales
  • Tech

Recent Post

How to Promote Your Music on Twitter

How to Promote Your Music on Twitter

May 27, 2023
Execution of SEO link building and its Process

Execution of SEO link building and its Process

May 18, 2023
Other Uses of Noise Barriers in Construction Areas

Other Uses of Noise Barriers in Construction Areas

May 16, 2023
The Future of Digital Marketing for Laundromats

The Future of Digital Marketing for Laundromats

May 13, 2023
Digital Transformation In Pharma

Digital Transformation In Pharma: Are You Changing Your Approach Along With Your Enterprise Approach?

May 13, 2023

Advertisement

Recent Post

How to Promote Your Music on Twitter

How to Promote Your Music on Twitter

May 27, 2023
Execution of SEO link building and its Process

Execution of SEO link building and its Process

May 18, 2023
Other Uses of Noise Barriers in Construction Areas

Other Uses of Noise Barriers in Construction Areas

May 16, 2023

Quick Link

  • Contact Us
  • Finance
  • Accounting
  • Sales
  • Business
  • Marketing

Featured

Copyright © 2023 ibusinessangel.com | All Right Reserved .

No Result
View All Result
  • Home
  • Finance
  • Accounting
  • Sales
  • Business
  • Marketing

Copyright © 2023 ibusinessangel.com | All Right Reserved .

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In