Ag. 2021, 14,14 of(Fielitz 1974; Solnik 1974; Zhou 2014; Alexeev and Dungey 2015), but surprisingly, following researchers considered a longer time period (Domian et al. 2007; Benjelloun 2010; Alexeev and Tapon 2014; Kurtti 2020), the number of stocks essential to lower the diversifiable threat towards the lowest doable level has enhanced. Moreover, Statman (1987) concluded that borrowing investors should hold a minimum of 30 stocks to create a well-diversified stock portfolio, or at the very least 40 stocks if we MCC950 Autophagy usually do not look at leverage, and right after updating his previous study he showed that an investor would need at the very least 300 stocks in his Decanoyl-L-carnitine manufacturer portfolio for the marginal benefit to exceed the marginal cost of diversification. As Campbell et al. (2001) note in their study, and as has also been noted by other researchers, unsystematic danger has undoubtedly enhanced over the previous thirty years inside the United states relative for the general variability from the stock market place, whilst alternatively, correlations amongst stocks within the economic market have declined correspondingly. This underscores the need for larger portfolios with a lot more stocks to lessen diversifiable risk. Is has also been identified that firms could reduce idiosyncratic threat by compensating CEOs with inside debts (Lee et al. 2021). As mentioned earlier, whilst there is certainly nonetheless no consensus around the optimal number of stocks, recent analysis suggests that the size of a well-diversified portfolio is bigger these days, primarily resulting from decrease trading fees, as also noted by Kryzanowski and Singh (2010). Based on Alexeev and Tapon (2012), investors having a bigger portfolio are a lot more most likely to underperform the benchmark after fees. Based around the results of the prior studies, it truly is achievable to do away with a large percentage of diversifiable risk using a tiny portfolio and consequently the want for bigger portfolios, mainly developed and held by equity funds, is just not justified. Research have shown that tail fatness (TF) isn’t eliminated by portfolio diversification, which could possibly be one of the reasons why investors with diversified portfolios face higher losses for the duration of market place downturns (Eom et al. 2021). It truly is exciting to note that the optimal quantity of stocks also can be affected by the frequency with the data utilised. Alexeev and Dungey (2015) have shown that making use of lowfrequency information can result in an “exaggerated variety of stocks inside a portfolio”. In addition they emphasize that this distinction is exacerbated through times of monetary industry crises. Just for comparison, early research primarily based on (semi-)annual and quarterly information have shown that 8 to 16 stocks are adequate for optimal diversification (Evans and Archer 1968; Fielitz 1974; Zhou 2014). Some have made use of month-to-month information (Statman 1987; Beck et al. 1996; Gupta and Khoon 2001; Statman 2002; Tang 2004; Brands and Gallagher 2005; Irala and Patil 2007; Dbouk and Kryzanowski 2009; Benjelloun 2010; Kryzanowski and Singh 2010; Stotz and Lu 2014; Kisaka et al. 2015; Haensly 2020; Raju and Agarwalla 2021), but in addition weak data (Solnik 1974; Bradfield and Munro 2017; Oyenubi 2019; Lee et al. 2020) or even daily information (Domian et al. 2007; Alekneviciene et al. 2012; Alexeev and Tapon 2012; Chong and Phillips 2013; Ahuja 2015). As Alexeev and Dungey (2015) additional point out, high-frequency information undeniably improves danger assessment and brings considerable advantages to decisionmaking. Additionally they note that when greater frequency information is deemed, the number of stocks essential to attain the preferred danger reducti.