How many stocks and ETFs should we have in our portfolio to better manage diversification to minimise risk?

Based on the textbook answer, anything more than 30 does little to no effect on your portfolio risk

That also explains why most indexes are made up of only 30 stocks e.g. STI, Dow 30 futures.

This article is rather interesting https://www.investopedia.com/articles/stocks/11...

TLDR: Minimising risk does not equate to increasing diversification. You have to ensure your portfolio is not overly concentrated to any industry / sector / geographic location.

I think the question to ask yourself should concern the quality of your ETFs rather than the quantity. Having five different S&P 500 ETFs in your portfolio is not the same as having just one global ETF. Clearly, one is way more diversified than the other.

Not saying you'll be buying five S&P 500 ETFs, that's just for illustration. Although, I have seen people ask questions about diversifying across different platforms when in effect they were buying the same underlying assets.

So really, diversification should not be thought of so simplistically as being based on numbers alone.

We should consider diversification by geography, by sectors, by markets, etc. Choose something that's reasonable for yourself at the end of the day.

Some people are satisfied to just buy IWDA + EIMI, for example (developed and developing markets). That's perfectly reasonable. Others won't sleep till they are assured of owning at least five sectors in at least 10 countries. That's also reasonable.

Ultimately, portfolio composition and asset allocation is a very personal thing. I think it's more important to understand the importance of diversification and its impact on your portfolio than the specific number of ETFs you need to diversify.​​​