For a beginner who is into stock picking, can you advise how many stocks should one manage for their first year?

Hey Anon,

Fellow beginner here too, I would usually try to keep my portfolio around 5 stocks and up to a maximum on 10. This was mostly based on what was shared by Adam Khoo in his video on position sizing (link below). There's a neat formula to gauge the number of shares you should buy based on the risk and your capital. 😬

https://youtu.be/pFHTccTf3QM

The key point to take note of when it comes to diversification is mainly on how much capital you have and how much time you have to do research on them.

Regarding capital: if let's say your capital is not that large, putting $500 each into each company might not help to grow your wealth as quickly. If one of your company hits 100% returns, it is only a small move up for your entire portfolio.

Regarding time: It is also important to do research of the companies you hold from time to time. So if you hold too much, you might be overwhelmed with it all, even worse you might just forego reading up on them entirely. What is also important is if you haold company X, you might also need to do research and read up on their competitors as well.

Similarly, I am also interested in many companies, but I have to stay focus and only pick the few that I have the highest conviction in. Diversification is fine, but too much diversification is for people who don't know what they're doing.

Hi, a good number to start would be around 10 stocks, and this should include ETFs. You will need to balance between having a diversified portfolio vs spending time to monitor and manage it.

I use these two ways to achieve diversification - 1) buying ETFs such as Index Funds, and 2) using Roboadvisors' portfolios.

For ETFs, you could consider STI ETF on SGX (Top 30 companies listed on SGX), S&P500 Index (e.g. SPY, VOO), US Tech Stocks (e.g. QQQ), China Tech Stocks (e.g. CQQQ or 3033 on HKEx), Emerging Markets (e.g.VWO), and Disruptive Tech (e.g. ARKK).

For Roboadvisors such as Endowus, Stashaway or Syfe, they can customise your portfolios according to your financial (or investing) goals, and more importantly, your risk profile. I use Syfe's Equity100 to provide diversification. It is 100% allocated to global equities with over 1,500 stocks of the world’s top companies through broad-based ETFs.

I would recommend keeping your investments simple. Do spend more time gaining knowledge on personal finance or investing, and learn to differentiate between market noise and good financial advice.

Hope this helps! All the Best in your investment journey!

I have about 20 companies that I invest in.

8 in SGX, 9 in US, 2 etf, 1 crypto. But my US are mainly tech so it's easier to read. I'm in fact looking at a few more companies that I think have strong potential!