Personal Wealth: Diversifying? Volatility Matters More Than Size

Personal Wealth: Diversifying? Volatility Matters More Than Size

A couple of researchers at financial advisory firm NDVR in Boston, Yin Chen and Roni Israelov, have come up with a new take on an age-old question for investors: How many stocks should you own for a properly diversified portfolio? The academic approach to finding an answer goes back to a 1968 Journal of Finance paper by John Evans and Stephen Archer that included a graph that you can find versions of in almost any introductory finance book and many …