A Newbie Guide to Investing

[CityFarmer]

Hi Experts,

I need a little advise about diversification. As I'm very new to investing and don't have a big capital to start with. In fact I only started about few months ago this year. Let's say for example a $10K capital. Any recommendation on how many stocks should I have in my portfolio and the percentage of allocation. I feel like if I over diversify, I can only gain a little. Perhaps at least $2K capital per stock? Thanks in advance.

Theoretically, you should achieve reasonable diversification with 5-10 stocks. Lower capital might take the lower end, in order not to over-dilute the effort, IMO.

Thanks Mod. Even for only 10K capital is it advisable to have more than 5 stocks?

It depends on the risk profile and objective

If the objective is to adopt a sustainable good habit of risk-adverse and long term, we should start from very beginning. All-in, or most-in might works in short-term, but we will never know the "unknown unknowns", let alone the "unknown knowns" due to skill level

Diversification in 5 stocks, means average 20% per stock, but it should be able to increase to 30% on one individual stock, depend on confidence level.

I am skeptical on all-in or most-in strategy, with more than 50% in one stock.