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Is your ASX share portfolio too diversified?

The article from MSN Money discusses the concept of diversification in ASX share portfolios, questioning whether investors might be over-diversifying their investments. It highlights that while diversification is key to reducing risk, too much diversification can dilute potential returns and complicate portfolio management. The piece explains that having too many stocks can lead to a situation where the portfolio mimics the performance of a broad market index, negating the benefits of individual stock picking. It suggests that a well-diversified portfolio should ideally contain a balanced number of stocks, typically between 15 to 30, to achieve a good mix of risk and reward. The article also touches on the psychological aspect of investing, where investors might feel safer with more stocks but could be missing out on significant gains from their best-performing assets. Lastly, it advises investors to periodically review and possibly consolidate their holdings to ensure their portfolio aligns with their investment strategy and goals.

Read the Full MSN Article at:
[ https://www.msn.com/en-au/money/top-stocks/is-your-asx-share-portfolio-too-diversified/ar-AA1vvlnK ]