When ChatGPT was asked how many stocks an investor needs to own to be diversified, the answer cited was that 20 to 30 stocks capture most diversification benefits, while 30 to 50 stocks offer diminishing returns.
Half Full or Half Empty - Stock Picking Still Loses, Value Still Wins
“Almost Half of Stock Pickers Beat the Market in Early 2022 Selloff” read the WSJ News Exclusive headline on Thursday 9/15/22. The story goes on to explain that this year’s middling performance is the best year for active stock pickers since 2009!
For ATX Portfolio Advisors® clients and Accountable Update readers, that probably is no surprise. In fact, as I pointed out in an April 2019 Accountable Update titled “Mutual Fund Landscape”, there are normally fewer than 25% of actively managed funds that tend to survive and outperform their benchmarks.
2 Tips for Dealing with Market Volatility
Last week at my Rotary Club meeting, our scheduled speaker was a no show. When our President asked if anyone had something they would like to talk about, I offered to present one of my recent Accountable Update articles, 10 Questions for Every Investor.
The article was well suited for an impromptu presentation, with several charts interspersed with practical advice. But when we got to the Q&A, it became apparent that the recent market volatility was weighing on some folks. The question that was seemingly on everyone’s mind was, “When will stocks stop going down?”
My answer, as it is anytime someone asks me what I think the stock market will do tomorrow, is to offer a couple of tips for dealing with market volatility.