Diversification for Angel Investors

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How many companies should an Angel Investor invest in?

Diversification is the idea of owning multiple investment positions, such that you are reducing nonsystemic risk (risk that is unique to the individual holding).

Ben Graham’s work is widely accepted as the standard when it comes to value investing and his ideas in The Intelligent Investor have guided investment principals for some time. Ben made popular the idea that 15 holdings is the magic number when it comes to diversification, after which the introduction of new securities does little to reduce the nonsystemic risk of the overall portfolio.

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