Course 302: Building Your Mutual Fund Portfolio
Don't Worry about an Optimal Number of Funds
In this course
1 Introduction
2 Define Your Objectives and Priorities
3 Develop a Core
4 Limit How Much You Put Outside the Core
5 Don't Worry about an Optimal Number of Funds
6 Consider Your Tax Situation

There is no ideal number of funds to own. We have seen fund junkies build 30-fund portfolios while other investors can be perfectly diversified owning just two or three funds.

What you should worry about is how diversified your portfolio is, regardless of how many funds are in it. If all of your funds were growth funds or were heavy on a particular sector, you could own dozens of funds and still not be adequately diversified. Conversely, a one-fund portfolio could be better diversified than a multifund portfolio, if that one fund were an index fund covering the entire stock market.

Next: Consider Your Tax Situation >>


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