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I've heard from a couple of sources that the optimal method of
diversification
in a stock portfolio is to have no more than 3% in any single issue. To be
fully invested would there require owning a total of 33 individual stocks.
Of
course the reason cited is that anything can hapen in the way of earnings
surprises to individual issues; but with a total of 33; any price shocks
will
not adversely affect the total portfolio performance.
I'm wondering if there is any type of statistical data; or concept; to back
up
the idea of how the number 33 was arrived at.
Thanks for any comments.
chas
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