Ganesh Komma argues that owning 40 stocks or 20 mutual funds dilutes returns and adds needless complexity. True diversification means spreading across asset classes and geographies, not collecting funds. For most people, 5-6 mutual funds and around 20-23 stocks are enough.
You think owning 40 stocks 20 mutual funds is diversification? It is diversification over diversification. Water downs your returns, you get average returns with more complexity. True diversification is across asset classes. It can be equity, debt, gold, real estate and geographies. Not just many stocks. For most people, few mutual funds. Maybe like a 5 to 6 mutual funds like between 20 to 23 stocks is more than enough. Simplicity beats complexity in investing. Stop collecting funds like stamps.
How Geopolitical Conflicts Impact Stock Markets | Investor Strategy | Ganesh Komma
