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Ideal Number of Stocks to Buy in Stock Portfolio in India

by | Last Updated On September 15, 2022

Ideal Number of Stocks to Buy in Stock Portfolio in India – Beginners Guide

Understand Ideal Number of Stocks to Buy in Stock Portfolio in India – Beginners Guide to How Many Shares of Stock Should a Beginner Buy for Profit.

Ideal Number of Stocks to Buy in Stock Portfolio in India

How Many Stocks to Buy in Stock Portfolio in India

Many Beginners to Stock Market and Share Trading often Ask:

  • How many shares of stock should a beginner buy?
  • How many shares should i buy to make a profit?
  • How many stocks in a portfolio india?
  • Is 50 stocks too many or is 100 stocks too many?
  • Is 10 stock portfolio good? How many stocks should i own
  • How many shares can i buy at once

Well, It is next to impossible to keep track of a large number of stocks in a Stock Portfolio. Hence it is advised to buy and keep track of few selected and well researched stocks and focus on these stocks only.

How to Select the Best Stocks to Buy for a Stock Portfolio

I have already explained in my previous tutorials Fundamental Analysis of a Company and How to Pick Best Stocks to Buy in India. Below are some more tips to help you select the best stocks to buy:

  1. If a company is coming up with a dynamic new product or services and the product or services has great demand then the stock can be very active. Focus of these stocks.
  2. Focus on top performing sectors such as Textile Stocks and buy shares of top performing stocks. Don’t buy stocks that look cheap. Remember, it is quality that matters and not the quantity.
  3. Keep track on well performing mutual funds and see where are they are investing.
  4. Keep an eye on outstanding stocks and stocks that make new highs and volume. Look for opportunities when these stocks break their high prices and then buy these stocks.
  5. Understand market trends and then select your stocks.
  6. Sudden or unusual price fluctuation is not any signal to buy. Don’t buy blindly on market dips. Use your brain and do research before buying any stock. Stay away from Volatile Stocks.

Ideal Number of Stocks to Buy in Stock Portfolio in India

Budget ($ or Rs.) Number of Stocks to Buy
< 20,000 1 to 2 Stocks
20,000 to 50,000 2 to 3 Stocks
50,000 to 200,000 3 to 5 Stocks
200,000 to 500,000 5 to 7 Stocks
> 500,000 7 to 10 Stocks

FAQs: Ideal Number of Stocks to Buy in Stock Portfolio

  • If Budget is Less than 20,000, then Buy 1 to 2 Stocks;
  • If Budget is Between 20,000 to 50,000, then Buy 2 to 3 Stocks;
  • If Budget is Between 50,000 to 200,000, then Buy 3 to 5 Stocks;
  • If Budget is Between 200,000 to 500,000, then 5 to 7 Stocks; and
  • If Budget is More than 500,000, then Buy 7 to 10 Stocks.

5% Rule in stocks means that an investor should not allocate more than five percent of their funds in any single stock. Diversify your Investment.

Using the 5% Rule, you can own as many as 20% stocks for diversification.

An ideal portfolio mix would be:

  1. 40% is Bonds
  2. 40 % in Stocks
  3. 20% in Real Estate

The Rule of 10 means that NEVER Hold a Stock that Fall 10% of the Price at which you bought it. Sell it immediately as soon as the stock fall 10% of your Cost Price.

Start with 2-3 stocks in the beginning and gradually increase it to 10. Later when you have enough fund, you can increase the number of stocks in your portfolio.

Conclusion

I hope now you Understand Ideal Number of Stocks to Buy in Stock Portfolio in India. Please SHARE this Article with others. Thunks!

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Santosh Das

Santosh is an Electronics Geek, Blogger and Young Entrepreneur. He possesses vast experience in the field of Electronics. Santosh has been an Investor and Investment Portfolio Manager for the Past over 20 Years. Keep visiting for daily dose of Share Trading and Stock Market Tips and Tutorials.

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