Hi there,
Happy to answer that. Typically, an investor should not hold more stocks than they can actively keep on top of. Furthermore, the purpose of diversification is to limit unsystematic risk (which is risk associated with a specific stock or industry). Research has shown that the benefits of diversification tops out around 26-28 stocks. This means that up until then, there is a meaningful increase in the benefit of diversification. After that however, there is only minor and incremental benefits. Does this mean you should not hold more than this amount of stocks? No. It just means if the purpose of holding a certain number of stocks to diversify, then you are only seeing limited benefit by expanding beyond 30 stocks.
Personally, I have two accounts - one dividend growth and one growth portfolio. In my DG portfolio I own 35 stocks. Now, keep in mind i own several stocks that are in the same industry. Like BMO & TD for banks and PPL, IPL and ENB in pipelines. Why do I have multiple stocks in the same industry? Likely because I found they offered more value at the time. Case in point, for the longest time all I owned was TD. Then, TD started to outperform and looked expensive compared to some of the other Big 5 banks. When it came time to add to my banks, I chose BMO instead because i felt it was the best buy of the Big 5 at the time.
As for my growth portfolio - i own 17 stocks - but am much less diversified. Case in point, I own NEWU, DOC, WELL and HTL - all of which are in the telehealth/clinic space.
The key takeaway. If the purpose of your portfolio is to have a well balanced and diversify, then topping out at 25-30 stocks makes sense. Secondly, onIy own what you can realistically stay on top of and worth noting, some require much more attention than others. In total, I have about 50 but the 17 in my growth take much more time to stay on top of than those in my DGI which are much less speculative.
Mat