facebookIs there any exact amount or thumb rule that I should not overbuy a specific stock, in order for me to diversify my portfolio? - Seedly

Anonymous

04 Aug 2020

Stocks

Is there any exact amount or thumb rule that I should not overbuy a specific stock, in order for me to diversify my portfolio?

Hi all, just checking whether is the any exact amount or thumb rule in investment term, if I would want to diversify my portfolio? Or most of you would just invest on ETF comprise a list of companies?

Discussion (3)

What are your thoughts?

Learn how to style your text

Hi anon, there's no hard-and-fast rule for this. It all depends on your risk appetite and how strong the company is. If you can't sleep well at night, it means that you have bought too much of the company or have invested in the wrong business.

For myself, I wouldn't want any particular company to take up more than 15% of my portfolio.

ETF is a good way to diversify your portfolio instantly.

Colin Lim

19 Apr 2020

Financial Services Consultant at Colin Lim

There is no exact rule... You just do your due diligence before committing. If a stock has potential, you can focus... Den it also depend on your risk? If you cannot stomach higher risk... Den diversified your portfolio.

Pang Zhe Liang

19 Apr 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

Based on your risk appetite and asset allocation. If your intention is to have 50% equities, then en...

Write your thoughts