Warren Buffett on the Myth of More: Why Too Many Stocks Can Lead to Downfall

Full quote provided:

“Diversifying is an easy way to reduce risk but makes it difficult to maintain profitability. At any given time, there are less than a few dozen outstanding stocks, and most investors wouldn't be able to identify even half of them. So if an investor can find even 5 great ones, they can compose a sizable core of a portfolio. The greatest long-term investors like Buffett made their fortune from holding a few top stocks rather than trading in and out of hundreds.

We've found that 20-30 stocks is usually plenty to diversify against idiosyncratic risks from individual positions. Passive investing with index funds is certainly popular these days, but it's rarely pointed out that these strategies often suffer from over-diversification."