How many stocks should you own?
Mainstream advice says 25 to 30. The value tradition says far fewer. Both are right, for different people — and the number that matters is how many businesses you can genuinely keep up with.
The two honest answers
Conventional guidance from large advisers is that if individual shares make up the majority of your equity holdings, you should hold roughly 25 to 30 of them, with 15 as a floor to avoid over-concentration in one company or sector. That is sound advice for someone who is not going to research each holding deeply.
The value investing tradition says something close to the opposite: concentrate in the few businesses you understand best. Buffett's position has been that wide diversification is protection against ignorance, and makes little sense for someone who knows what they are doing. Both answers are correct — for different people.
Where the maths actually lands
The diversification benefit is steeply diminishing. Moving from one holding to ten removes most company-specific risk. Moving from ten to thirty removes some more. Beyond about thirty you are mostly buying the market at higher cost and more effort than an index fund would take.
| Holdings | Company-specific risk | Research burden |
|---|---|---|
| 1–3 | Very high | Trivial |
| 5–10 | Moderate | Manageable |
| 15–30 | Low | Substantial |
| 50+ | Very low | Unrealistic for one person |
The question that actually decides it
How many businesses can you genuinely keep up with? Each holding means reading the annual report, following results, and knowing when the investment case has broken. Most people working full-time can do that properly for somewhere between five and fifteen companies.
Holding forty shares you cannot follow is not diversification. It is forty positions you will hold through a deterioration you never noticed, because nobody was watching. That is a worse outcome than eight companies you know intimately.
Concentration is not just about the number
Sector overlap
Eight holdings that are all UK banks is one position wearing eight hats. Count exposures, not tickers.
Position sizing
Twenty holdings where one is 60% of the portfolio is a concentrated portfolio. The distribution matters more than the count.
Correlation in a crisis
Things that look unrelated in normal conditions frequently fall together when credit tightens. Genuine diversification comes from different economic drivers, not different industry labels.
The index you already own
If you hold a global tracker alongside individual shares, you already have thousands of holdings. Your individual positions can then be deliberately concentrated, because the diversification job is done elsewhere. See what is an ETF.
A workable structure
A common and defensible approach: an index fund as the core, plus a smaller number of individual companies you have valued and want to own for years. That gives you broad market exposure without pretending you can research forty businesses, and lets the concentrated part of the portfolio actually be concentrated.
Whatever number you land on, the discipline is the same — own it because you decided what it was worth and the price was below that, not because you needed another holding to feel diversified.
Fewer companies, understood properly
Oak Growth scores roughly 1,000 companies on moat, management, economics and value, with an estimated intrinsic value for each — built for people who want to own a handful of businesses they actually understand.
Explore Oak GrowthCommon questions
How many stocks should I own?
Mainstream guidance suggests 25 to 30 individual holdings with 15 as a minimum if individual shares are the bulk of your equity exposure. The value investing tradition argues for far fewer, concentrated in businesses you understand deeply. The deciding factor is how many companies you can realistically follow properly.
Is 10 stocks enough to be diversified?
Ten holdings removes most company-specific risk, and the benefit of adding more falls away steeply beyond that point. What matters alongside the count is whether those ten sit in different industries with different economic drivers, and whether any single position dominates the portfolio.
Is it better to own a few stocks or many?
Few, if you research each one thoroughly and can tell when the investment case breaks. Many, if you don't intend to follow them individually — in which case an index fund does the job more cheaply and more completely than a long list of shares you cannot monitor.
What did Warren Buffett say about diversification?
His position has been that wide diversification is protection against not knowing what you are doing, and is unnecessary for investors who understand the businesses they own. Berkshire's public equity portfolio has historically been highly concentrated in a small number of large positions.
Also see: How to diversify your portfolio → · Warren Buffett's investment strategy → · What is an ETF? →