To make high-quality research more accessible and easier to explore.

Fields:

How Many Stocks Make a Diversified Portfolio?

Journal of Financial and Quantitative Analysis 1987 22(3), 353
We show that a well-diversified portfolio of randomly chosen stocks must include at least 30 stocks for a borrowing investor and 40 stocks for a lending investor. This contradicts the widely accepted notion that the benefits of diversification are virtually exhausted when a portfolio contains approximately 10 stocks. We also contrast our result with the levels of diversification found in studies of individuals' portfolios.