How many stocks should you own when starting an investment program? And how many shares should you have in each company before adding another?

These are two of the most commonly asked investment questions by novice investors.

Actually, I don't think there is any right or wrong answer to these questions. But there are a couple of key points to remember:

• Eventually, you'll probably want a stock portfolio that has 10-15 stocks. You can have a reasonably diversified portfolio with that many stocks, especially if you have other investments, such as mutual funds, bonds, etc. However, don't worry about getting to 10-15 stocks in a few weeks or months. I think investors become so concerned about getting to that "diversified" portfolio quickly that they fail to start the process. Trust me - if you maintain an investment program, you will get to 10-15 stocks rather quickly. In fact, your biggest problem will not be having too few stocks, but too many. So don't feel you need to own 15 stocks overnight. Just start the process. Buy a couple of stocks to get the ball rolling. Fortunately, via BUYandHOLD, it is very easy and inexpensive to take positions in a few stocks to get an investment program up and running.
  
  
• How many shares should you own before adding a new stock? Ask 10 people and you'll get 10 answers. I generally build a position to 25-50 shares before adding another stock in a portfolio. If you want to do it at 20 shares, that's fine. If you want to wait until you have 100 shares in each company, that's OK, too. What you don't want to do is own one share in 25 different companies. Spreading your share ownership so thin complicates your record keeping and does not leverage your best investment ideas.

In summary, a good approach for new investors is to take positions in three or four companies, build your positions to around 25-50 shares in each of the stocks, and then add new companies. This approach will help you start the process and allow you to build a portfolio in a simple, methodical way.