[prnd32]

What is the ideal number of stock positions one must hold at a given time?

[TSO]

The answer ultimately depends on how comfortable you are with the degree of diversification. I am personally comfortable with holding no more than ten to fifteen companies at a time, even though traditional finance enthusiasts would tell you it doesn't provide any "diversification protection".

From the traders' perspective, it probably has something to do with your ability to keep track of an open position and do something whenever the market acts "out of the norm". For example, take the so-called "Iron Condor" strategy with options (something I just learned today at work). In a nutshell, it's two vertical spreads on two opposing positions, which profits from the volatility of the underlying stock price within a prescribed range BUT is exposed heavily to catalysts that can cause leaps or freefalls in the stock price.

If you can keep track of multiple Iron Condors, vertical spreads, naked options, etc, ON TOP of actual share ownership, all without going crazy from the uncertainty, then you're comfortable with the degree of diversification. The next question you have to answer is how much risk you're willing to take by concentrating your portfolio into a select few.

[bauer]

What is the ideal number of stock positions one must hold at a given time?

Any number that you can monitor preferably on a daily basis and check their financial reports (quarterly basis) with consistency.

Sa local stocks, for me it ranges between 5 to 8 only. mas konti, mas kontrolado.

[prnd32]

The answer ultimately depends on how comfortable you are with the degree of diversification. I am personally comfortable with holding no more than ten to fifteen companies at a time, even though traditional finance enthusiasts would tell you it doesn't provide any "diversification protection".

From the traders' perspective, it probably has something to do with your ability to keep track of an open position and do something whenever the market acts "out of the norm". For example, take the so-called "Iron Condor" strategy with options (something I just learned today at work). In a nutshell, it's two vertical spreads on two opposing positions, which profits from the volatility of the underlying stock price within a prescribed range BUT is exposed heavily to catalysts that can cause leaps or freefalls in the stock price.

If you can keep track of multiple Iron Condors, vertical spreads, naked options, etc, ON TOP of actual share ownership, all without going crazy from the uncertainty, then you're comfortable with the degree of diversification. The next question you have to answer is how much risk you're willing to take by concentrating your portfolio into a select few.

Thanks TSO. I assume the figures you mentioned are for full time traders, isn't it?   If I have a day job and if I am just starting to trade/invest, how many is ideal?  

[pmtmember]

as long as you can monitor it kahit ilan. for me, max ko yata was just 10?

[decapolis]

Any number that you can monitor preferably on a daily basis and check their financial reports (quarterly basis) with consistency.

Sa local stocks, for me it ranges between 5 to 8 only. mas konti, mas kontrolado.

Warren Buffett would agree on Bauer, according to him:

"Unless you are going to have an extra intensity to the game, in which diversification is an extreme mistake.
You only need to know 6 businesses, really well. Knowing a 7th may bring you down. Lot of people have got rich on there best idea.
Probably have half it in his best."

[TSO]

Thanks TSO. I assume the figures you mentioned are for full time traders, isn't it?   If I have a day job and if I am just starting to trade/invest, how many is ideal? 

Even one is "ideal" if you devote a LOT of time courting the business.

[decapolis]

Sir TSO may time ba na 1 stock lng nsa portfolio mu?

[TSO]

Yeah. Every time I first enter a market. Philippines, edc muna. Usa, alv muna.

[prnd32]

Yeah. Every time I first enter a market. Philippines, edc muna. Usa, alv muna.

sir OT question lang po.. do we have a thread here in PMT on how to enter the US and other markets?

[TSO]

Iirc we do. But if I were you, look up e*trade and ask how you can be a part of it despite being a foreigner. You might have to sign up for an ITIN thru the IRS before being eligible though.

[chaaar]

ideal number is 4-5 so you can closely monitor it