How Many Mutual Funds Should You Have in Your Investment Portfolio?

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Discussion

Jeanette from California posted over 2 years ago:

I have a mix of index (Vanguard) and active management---8 with Vanguard and a total of 12 funds - with addition of one Total Bond Market Vanguard and a money market fund..
The funds outside of Vanguard are American Funds and Templeton Global transferred to my IRA from 403B at work when I retired..and I did not pay commissions-- they provide more non-US exposure..

Our assets are over 1 million-??? does higher $ amount allow for more that suggested 8 funds????
- - our desire is to stay with funds (not individual stocks, for personal comfort)
As I am new to AAII- will there be a comment from the author or another reader on this question? thanks


Paul from California posted over 2 years ago:

In my opinion the article reflects some good principles in keeping the number limited so the investor can keep better track of what is happening to their investments and to minimize overlap of fund objectivess. I am partial to Vanguard for their low expense ratios.


T Chiao from California posted about 1 year ago:

Hi,
I have hard time to limit funds to 8. In fact I am seriously considering following professor Isaelsen's research using 12 as reported in:
WWW.7Twelve.Portfolio.Com
Welcome your comments.
TTC


James Smith from Maine posted about 1 year ago:

Ric Edelman, "Rescue Your Money," lists an example of a truly diversified portfolio as having 16 different sectors and gives his supporting reasons for that number.


Paul Tichler from New York posted 8 months ago:

Your advice about the benefits of active management vs. indexing is not borne out by my observations at least with regard to vanguard funds, There seems to be little difference in the long term performance in the midcap area. Also no mention is made of the small cap value premium which seems to persist over long time periods.


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