There are two commonly use ideas come to my mind when I think how to diversify a portfolio.
1. There is an old saying “Never put all your eggs in one basket”
2. Also godfather of investors said that “wide diversification is only required when investors don’t understand what they are doing.”
Some books suggest that 20 is the reasonable limit of companies under your portfolio.
I would like know your thoughts about this subjects. I know this is not a hot topic but it would be greatly appreciated all the experts as well as newbie comments on this.
Do you allocate money in different sectors? Or companies? Etc.....
How do we need to diversify a PF at Colombo Stock Exchange (CSE)?