How many stocks should you hold? – Dale Gillham’s latest ASX Newsletter Article

By Dale Gillham

Below is a small preview of my latest article for the June edition of the ASX newsletter. The ASX have titled it ‘How many stocks should you hold?’.

You may want to read another article we have written for the ASX in recent times so follow this link.

If you prefer to skip the text below and go straight to the ASX website to read the full article, click the link at the bottom of the page.

How many stocks should you hold?

When the ASX asked me to write an article about portfolio management, I must say that I was excited because this topic can be a little controversial, particularly as my view on the subject differs widely from the big institutions in the financial services industry. However, I understand why the ASX specifically asked me to write this article and you will too as you read it.

In my opinion, holding lots of stocks doesn’t get you a better return.

Managed funds are able to hold anywhere between 30 and 100 different stocks in their portfolios. To the investor, this probably sounds logical. But following this mantra often leads to poor returns and actually increases risk rather than decreasing it.

Over the years that I have been teaching and supporting traders and investors, I have seen portfolios constructed as per the above industry mantra, with 30 stocks or more. Typically, I found a third rising, a third going sideways, and a third going down, with the portfolios inevitably having achieved, at best, average returns.

In this article, I will explain how managing your portfolio can be different with a little know-how. By simply removing the shares that are falling in price, your returns can increase while risk falls.

Read the full article ‘How many stocks should you hold?’

Dale Gillham

Wealth Within

Also, to assist you further, Dale Gillham has recorded a Talking Wealth podcast series called Seven Steps to Successful Trading and so far have completed four recordings for you to listen to.

If you have any questions or have a specific share market tip you want us to cover,  feel free to email and we’ll get back to you within 2 business days.