Myth x Truth: Is diversifying a lot good?

It makes no sense to diversify between a very large number of stocks, as it is very difficult to find several investment opportunities at the same time that are equally excellent. The more investments you have, the harder it is to track and manage them all. Every investment requires research, monitoring and decision-making, and if you have a lot of investments, this can become a cumbersome and time consuming task. Also, by diversifying too much, you can dilute the potential returns of specific investments that are outperforming. If you invest in many companies or sectors, it is more likely that you will have average returns, as it is unlikely that all the investments in your portfolio will have very high returns. Our philosophy is to maintain a portfolio of 5-15 stocks, and we generally focus most of the portfolio on our top 5 investment theses.