How Many Stocks Should You Own? Math Behind Diversification Explained

How many stocks should you own in your portfolio? 1? 5? 10? 50? This is one of the most debated questions in investing — and most people get it completely wrong.

Some investors hold just 2-3 stocks thinking they've found the best ones. Others hold 60-70 stocks thinking more is always safer. The truth? Both extremes are hurting your portfolio — either through too much risk or too little return.

In this video, I Vishesh Saraf (CFA L1 & CMT L3 Cleared) break down the actual math and data behind portfolio diversification to find the real sweet spot — the number of stocks where you get maximum risk reduction without sacrificing returns.

📊 WHAT YOU'LL LEARN IN THIS VIDEO:

→ What a truly diversified portfolio actually looks like
→ How portfolio risk (standard deviation) is measured
→ The exact formula behind portfolio variance
→ How risk drops as you add more stocks — with real data
→ Why going from 50 to 100 stocks barely changes anything
→ The 15–30 stock sweet spot — and why it works
→ What happens when you over-diversify

🕛 TIMESTAMPS:

00:00 - 00:45 - Introduction
00:45 - 02:24 - Diversification Explained
02:24 - 06:04 - Logic Explained
06:24 - 07:40 - Optimal Number

⚠️ DISCLAIMER:

This video is for educational and informational purposes only. It is not investment, financial, or trading advice. The views expressed are personal opinions and may be biased. Markets are risky — always do your own research. I am not a SEBI-registered advisor. Please consult a qualified financial advisor before making any investment decisions. The channel is not responsible for any financial loss or profit that may occur.

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💬 Comment below: How many stocks do YOU currently own?

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