Skip to content

Best effort Quote by Peter Lynch

“There's no use diversifying into unknown companies just for the sake of diversity. A foolish diversity is the hobgoblin of small investors. That said, it isn't safe to own just one stock, because in spite of your best efforts, the one you choose might be the victim of unforeseen circumstances. In…” quote by Peter Lynch
Download Open image
“There's no use diversifying into unknown companies just for the sake of diversity. A foolish diversity is the hobgoblin of small investors. That said, it isn't safe to own just one stock, because in spite of your best efforts, the one you choose might be the victim of unforeseen circumstances. In small portfolios, I'd be comfortable owning between three and ten stocks.”

Peter Lynch

About This Quote

Source Interview: “Investing Strategies” on CNBC, 2005

Diversifying across many unknown stocks offers little benefit; a modest number of well‑chosen stocks balances risk and reward.

In simple terms: Don’t over‑diversify with unknowns.

Key Takeaway

Hold a few solid stocks.

Themes

investing diversification risk management

Mood

practical analytical

Type

finance advice

When to use this quote

  • retirement planning
  • risk assessment
  • financial advising

Key Concepts

portfolio theory stock selection market volatility

Questions to Reflect On

  • How many stocks suit your risk tolerance?
  • What criteria define a “solid” stock?
A Different Perspective

Too few stocks increase specific risk.

2.4 out of 5 (5 ratings)

More by Peter Lynch

Explore all 146 Peter Lynch quotes

More Best effort quotes

Browse all 109 Best effort quotes