“Never put all your eggs in one basket.” ~ Proverb
“Concentrate your energies, your thoughts and your capital. The wise man puts all his eggs in one basket and watches the basket.” ~ Andrew Carnegie
The fight of putting all your eggs in one basket and not doing so seems as old as the egg itself.
The story is the same when it comes to diversifying (eggs in many baskets) or concentrating (eggs in very few baskets) your investment portfolio.
So if you are grappling with this question – “How many stocks should I own to make a diversified portfolio?” – don’t worry for you are not alone in struggling with this question.
In this post, I will try to bring together a few theories on this topic of “concentration versus diversification” and see where they can lead us to.