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[quote=Anonymous]Most people who invest in individual stocks also invest a sizeable portion of their stock portfolio in index funds/etfs. You choose individual stocks to 'overweight' that position in your portfolio--so if, based on your research, you think a stock will perform better than average you buy it to have more of its growth potential (or dividend) in your portfolio. If you are choosing relatively safe bets with low volatility you could have 5-10 stocks, but if you're investing in higher growth stocks it's better to diversify among 25+ as there are more likely to be losers than winners, but 1 big winner could make up for them all (e.g., you can only lose 100% of your investment in a given stock at worst, but a winning stock could grow by 10x+).[/quote]
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