Reducing your stock portfolio’s volatility is getting increasingly difficult.
That’s the conclusion of researchers who—at the top of the internet-stock bubble around 22 years ago—calculated that a stock portfolio needed to own at least 50 stocks to ensure that its volatility was no greater than that of the market as a whole.
That was a much greater number than in previous decades, when as few as 15 stocks would have done the trick. But a 50-stock portfolio would still have had about the same level of volatility, since the overall market’s volatility hadn’t changed much from earlier decades at the turn of the century.
Today the picture is different, the researchers’ latest study shows. Overall market volatility has grown—markedly—over the past couple of decades. So, while 50 stocks are still enough to match a portfolio’s volatility to the overall…
