12-11-2021, 11:15 AM
Keep in mind that the originally posted comment was made in 1934 before the internet and online brokerages. It is MUCH easier to learn about and know a company now than it was 85 years ago. Research reports that used to cost $100's of dollars are now available free with your brokerage account. It's also much cheaper to own stock now than it was back then. With zero transaction costs and no account fees, there's no hurdle to owning many companies at little cost.
Personally, I like owning a wide breadth of companies across many sectors. With 1000's of stocks to choose from across 11 sectors, even owning 100 stocks can be done while still owning quality companies. I own roughly 80 companies across three portfolios, and I think casting a wide net has allowed me to own winning stocks that I'd have missed otherwise if I held a concentrated portfolio.
Some of my best stocks like NVDA, TTD, LOW, UNH, BLK, SQ, ETSY, TSCO, ZTS, SHOP, FB, DLR, AVGO were bought long after I built my original 50 stock portfolio. Had I stayed concentrated and not spread out to other ideas, I'd have missed out on some nice gains.
That said, I can see why people concentrate their holdings on what they are comfortable and familiar with.
I can see whittling down names when nearing retirement like Fenders is doing now, but for someone in their 20's, 30's, 40's, I think it's good to cast a wide net and try to find some home runs. It only takes one or two big winners to make a difference in a portfolio.
Personally, I like owning a wide breadth of companies across many sectors. With 1000's of stocks to choose from across 11 sectors, even owning 100 stocks can be done while still owning quality companies. I own roughly 80 companies across three portfolios, and I think casting a wide net has allowed me to own winning stocks that I'd have missed otherwise if I held a concentrated portfolio.
Some of my best stocks like NVDA, TTD, LOW, UNH, BLK, SQ, ETSY, TSCO, ZTS, SHOP, FB, DLR, AVGO were bought long after I built my original 50 stock portfolio. Had I stayed concentrated and not spread out to other ideas, I'd have missed out on some nice gains.
That said, I can see why people concentrate their holdings on what they are comfortable and familiar with.
I can see whittling down names when nearing retirement like Fenders is doing now, but for someone in their 20's, 30's, 40's, I think it's good to cast a wide net and try to find some home runs. It only takes one or two big winners to make a difference in a portfolio.