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It all depends but usually it is between 5 and 12 stocks.

It is closer to 5 stocks in a trading portfolio and between 8 and 12 for a longer term portfolio.

While it is true that diversification reduces risk, a portfolio of shares that is over-diversified is exposed almost exclusively to market risk, which cannot be eliminated by diversification

As a trader, if you are looking to achieve higher returns, you invariably need to take on a higher level of volatility to outperform the market.

Therefore, you need to hold a smaller number of shares around 5-8 to actively manage the specific risk.

If you do not have time to manage the specific risk then holding a portfolio of 8 to 12 shares enables you to reduce volatility without dramatically reducing returns.

You do not get twice the benefit from holding 20 stocks than you do from holding 10,and you certainly do not get 10 times the benefit from holding 100 rather than 10.

It makes sense to simply get rid of the stocks that are going sideways or down. We only want to hold stocks that are rising in price. ( if going long)

Assets that move sideways or fall in price have a negative effect on your overall ability to create wealth.

If stocks are falling in price, it increases your risk and reduces your overall returns.

Cheers Triathlete