Should I limit my investments to 20 well diversified stocks/funds?
23 years to retirement, have 401k, roth IRA, looking at both reitrement investing and current income. I've been told that 20 well diversified investments is a good limit, since there is only so much time in a day to keep track of them all. Do you agree?
- 1 decade agoFavorite Answer
If you do not have time to follow individual stocks you should stick with mutual funds. Do NOT own 20 different mutual funds. You can diversify by owning Large Cap, Mid Cap and Small Cap US (since this is where you live) and then add a fund or two that cover investments outside of the US. You can also break down your investments by growth and value. Dodge and Cox has just opened up again and they have a great long term track record for Large cap value. They also have an international fund. Fees are low. You can get the Vanguard Index 500 to cover the US for a core position. There are also many quality growth funds. You have so many options. Active funds vs index funds. I have the Dodge and Cox Stock fund, Vanguard Index 500, a small cap index fund, Fidelity Contra Fund (for growth) and I have an international mutual fund. So I have covered large cap value and growth, I have 2 index funds, large cap and small cap and I have international exposure. As I get closer to retirement I will shift some equity exposure to to fixed income to try to preserve my gains. I have about 20 years to retirement.
- Anonymous1 decade ago
No need to put all in diversified funds.
Put 25% in well 5 diversified funds, 25% in 100% Equity Funds under Growth Plan (non insurance), 25% in Fixed Deposit and the rest in Good Large Cap funds. (select 10 large cap funds from the entire sector. My Recommendations are below)
Mutual Fund: ICICI Prudential Growth Plan, Reliance Naturals, Tata Infrastructure, ICICI Realestate Fund.
Stocks: Jindal Steel(3+ years will multiple your money) and Power, SAIL, TATA Steel, UNITECH(long term, 1+), SBI, Reliance Petroleum, JSW Steel, Jindal SAW, Jindal Capital, etc.
All are recommending from todays price levels(13/May/2008).
- Anonymous1 decade ago
Its a wise idea to start investments but not in stocks, definitely on diversified mutual funds. Mutual Funds schemes invest in companies across all industry sector which is more beneficial than investing in one stock only. I would like to suggest you to invest not in one go but Systematically(SIP) and choose 10 well performed diversified equity funds, 5 well performed Balanced Funds, 2 well performed ELSS and the rest 3 should be Debt Funds. You should read the magazine "Mutual Fund Insight" and subscribe to Valuereasearchonline.com for numarous advises and guidance. Select all 5 or 4 stars funds, once you go through the magazine you will know what I am talking about, but should not invest more than 20 funds.
I wish you very best of luck.Source(s): http://www.valuereasearchonline.com/
- 1 decade ago
Twenty is a lot of stocks and way too many funds.
Go to www.moneyrec.com and post your assets and get some knowledgeable input. In the meantime, take what advice you get on certain boards with a grain of salt. In my opinion, you should direct your investment questions to sites dedicated to investments.
Anyway, that is my two cents.
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- TedLv 71 decade ago
With that much diversification, you should just invest in the market as a whole. That means Vanguard S&P 500 index fund or S&P depository receipts (symbol SPY)
- Uncle PennybagsLv 71 decade ago
For retirement accounts, that's way too many. 5 should be plenty.
3 for different classes of domestic stocks (small cap, mid-cap, big cap, value, growth, index, etc.)
1 for bonds
1 for international stocks.
Maybe a 6th one for REITS or commodities if offered.
However, if your plan allows it, you can skip all that garbage. In my IRA, I've got everything in one of those targeted retirement funds Fidelity offers. It's fairly low cost, and they diversify my holdings and allocate risk based on my retirement date. That money is spread into all sorts of different investments, but it's all in 1 fund.
- 1 decade ago
buy converted organics...its a great company tht is going to open up a plant before july 1st...and once they announce it the price is gonna go up before u even have a chance to buy it..its a company tht turns waste into organic fertilizer....its a great buy at this point..they will be mentioned on cnbc on friday..it trades under the ticker coin on nasdaq.