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What is the optimal diversification for your portfolio?

April 22, 2021 by Lauren Hua

Diversification is a strategy that investors may use to reduce risk in their portfolio. This is achieved by holding stocks in different sectors and different market caps. However, you can overdiversify and this can affect the performance of the portfolio. In this article we talk about the dangers of overdiversification and what the optimal number of shares is for a portfolio. Optimal Number of Shares for Diversification Twenty stocks is the optimal number to have in a share portfolio. Your …

The Benefits of Diversification

July 10, 2017October 12, 2016 by Michael Gable

When an investor is thinking of becoming a client, the first thing we do is conduct a free portfolio review. Often the portfolio contains either not enough stocks, or too many. This means that the first tip I can give someone is to ensure you have some proper diversification. The stock market can be rather volatile, so one way to protect you from adverse movements to your share portfolio is to diversify. Diversification is a strategy which involves acquiring shares …

Share Tips – 29 June 2026

June 29, 2026 by Michael Gable

Share tips and stock recommendations for the Australian (ASX) share market – buy, hold, and sell. Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au. This post is an extract from the newsletter dated 29 June 2026. You can access the full version of the article HERE. To stay up to date with our best recommendations, sign up to an 8-week FREE TRIAL of our weekly client research. Buy Recommendations ASX:WDS Although we have been a buyer of …

Share Tips – 6 April 2026

April 8, 2026 by Michael Gable

Share tips and stock recommendations for the Australian (ASX) share market – buy, hold, and sell. Michael Gable is an expert guest commentator for the stock market newsletter thebull.com.au. This post is an extract from the newsletter dated 6 April 2026. You can access the full version of the article HERE. To stay up to date with our best recommendations, sign up to an 8-week FREE TRIAL of our weekly client research. Buy Recommendations ASX:NHC I have been bullish on this thermal …

In what environments do ETF’s underperform individual stocks?

January 22, 2026 by Lauren Hua

ETFs (exchange-traded funds) can underperform individual stocks in several specific environments. The key reason is diversification: it lowers risk, but it also caps upside. Here are the main situations where that trade-off shows up most clearly. Strong Stock-Picker or Concentrated Winners Markets Environment: Markets driven by a small number of standout winners (e.g., early FAANG years, AI leaders like NVIDIA). Why ETFs underperform: ETFs dilute exposure to the top performers by holding many average or weak companies. A single well-chosen …