During a market downturn, people often talk about the importance of diversification. 🌐 How many stocks should you actually own to be well diversified? 🤔A prevailing statement is that you should plan to own 25 to 30 stocks if individual stocks are to make up the majority (50% or more) of the equity part of your portfolio. 💼 Owning at least 15 stocks helps avoid over-concentration in any single stock or sector. 📊You can obtain more than 90% of the benefits of diversification by owning just 12 to 18 stocks. 📈 But this doesn't mean that holding the Magnificent 7 and another 10 tech companies will reduce your portfolio's risk. 🚫The correlation between your holdings is crucial for diversification. 🔗 Generally, correlation ranges between -1 and 1. The lower the correlation between assets, the saf