How many stocks should be there in a 3-lakh portfolio?

Investing into the financial market is an art more than science.

With new investors joining the market everyday, the idea of investing is turning into ‘Get Quick Rich’ scheme which leads to more setbacks rather than actual investing for long-term wealth appreciation.

If you are a seasoned investor or someone who researches and invests their money, then direct stock investing is an amazing way to go.

Having said that, here we need to define what is your – ‘Risk Appetite’

If you are okay with seeing your stock investments dip by 10–60%, then you can proceed with stock investments.

Now, coming to question – How many stocks should be there in a 3-lakh portfolio?

Risk Appetite: LOW (ready to accept loss less than 10%)

• In this case, the investor can invest in stocks between 15–20
• This will spread the risk
• This will give balance between growth, dividend and evergreen stocks

Risk Appetite: MEDIUM (ready to accept loss less than 50%)

• In this case, the investor can invest in stocks between 7–10
• With sectoral focus, the investor can make good gains
• As focus is on returns, the investor might ditch dividend and safe/evergreen stocks

Risk Appetite: HIGH (ready to accept less upto 100%)

• In this case, the investor can invest in stocks upto 5
• Goal of this approach is concentration that uses High Risk – High Reward concept
• This approach is not advised for investors who are in the market for less than 5 years (as they might have not seen market cycles which can severely erode the invested money within few days)

Hope this gives you an idea

Also, if you are new and seeing too much information on stocks and ‘expert advice’ from friends and family – then better consider diversifying your investment into other investment vehicles like bonds, mutual funds, etc.

I have written a post regarding this earlier to give some insights on the same

Direct Stocks vs. Mutual Funds: Which Investment Option is Right for You?

Hope this helps

All the best

You can read more content linked to finance here

Finance – Lateral Thinking

Happy Investing and God Bless!

About the Author of Post:

The Author is an AMFI registered Mutual Fund Distributor (ARN-262589). Reach out to him via email: edteficonsult@gmail.com