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Forum nameGeneral Discussion
Topic subjectYou decide how many based on portfolio size and diversification goal
Topic URLhttp://board.okayplayer.com/okp.php?az=show_topic&forum=4&topic_id=13404032&mesg_id=13404300
13404300, You decide how many based on portfolio size and diversification goal
Posted by Cocobrotha2, Sun Sep-20-20 08:48 AM
You already know how much money you've got... you can figure out how much individual shares cost... now it's just a question of how much of your portfolio are you willing to invest in any 1 company.

If you're willing to put 50% of your money on one company, then you just figure out how many shares you can buy with that 50%. I think you'd at the very least want at least 2 shares so that you can sell part of your position without totally selling everything. So investing in AMZN ($2940) is probably way too expensive for someone who only has $10k to invest (unless they're using a service like RobinHood that lets them invest in fractions of a share).


For a well diversified portfolio, people recommend putting at most 5% of your portfolio in any particular stock.

So really, it's up to you. If you want to swing for the fences, you'll want to make big bets on a few companies. Just remember there's a sizeable risk you'll strike out too.

If you want a relatively low risk way to grow your money long term that beats inflation, then you diversify (easiest way to do this is to just "buy the market" by buying one of the total stock market index funds that invests in every stock).