There is a trade-off between holding too few stocks (high risk) and holding too many (difficulty in outperforming the market).

: To prevent a single "bad egg" from tanking your entire portfolio, many experts recommend that no single stock position should ever exceed 5% of your total portfolio value.

: Beginners may prefer assigning a set dollar amount to every new position (e.g., $1,000 per stock) to keep management simple. Determining Your Ideal Number of Stocks