Stock Diversification

Moshe Milevsky produced a NYSE (New York Stock Exchange) table showing the effects on your portfolio's investment risk of holding randomly selected stocks. As can be seen, risk is reduced by increasing the number of stocks in your portfolio. Just holding 10 stocks has a significant impact on risk reduction.

NYSE Stocks Held Risk Reduction
2 42%
4 64%
10 76%
20 81%

The "Beating the TSX" strategy of 10 stocks is a sound risk reducer.