Why I like to diversify into 20-25 stocks of different sectors by building a Noah Ark portfolio - a pair of each kind is good enough to survive the Great Flood.
I could afford 1 stock in the Noah Ark portfolio to wipe out 5% of my total capital and the rest of 19 stocks just need to make 5.3% each for the portfolio to breakeven.
When a portfolio is too diversify, we can't make fanastic gain neither do we lose so badly.
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