Are You Really Diversified? | Capital Compass & Key LIVE Ep. 9
July 2026 | Written By: Mark Gargano
Are You Really Diversified?
Why owning 20–25 stocks may not mean what it used to.
One of the most common investing principles is that owning 20 to 25 stocks provides enough diversification.
That idea has been around for decades.
But today's market looks very different than the one that shaped that advice.
In this edition of Capital Compass & Key LIVE, I discuss how market concentration has evolved and why investors should think differently about diversification in today's environment.
The rapid growth of a handful of technology companies has changed the makeup of many portfolios. While broad market indexes still hold hundreds of companies, a significant portion of their performance is now driven by a relatively small group of stocks.
That doesn't mean concentration is inherently good or bad.
It simply means investors should understand the tradeoffs they're making.
This conversation explores:
- Why owning 20–25 stocks may not provide the diversification it once did
- How today's market differs from previous decades
- Understanding concentration risk in the S&P 500
- The role of growth and value investing
- Why diversification is about managing risk, not guaranteeing returns
One question I often encourage investors to ask is whether they're comfortable with the level of concentration in their portfolio.
If you believe in the long-term growth story of today's market leaders, your portfolio may reflect that view. If your priority is reducing concentration risk, there are other ways to build diversification through different sectors and investment styles.
The important thing isn't finding a single "right" answer.
It's understanding the portfolio you own and making intentional decisions that align with your long-term goals.
Capital Compass & Key LIVE is a series where I share perspectives on investing, tax strategy, and long-term wealth planning, drawing on decades of experience working with business owners, families, and advisors.
Thank You For Reading
Disclosure:
Investment advice offered through National Wealth Management Group, LLC, an SEC-Registered Investment Adviser.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The information presented is for educational and informational purposes only and is not intended as a recommendation or specific advice.
Additional Disclosure:
This material does not consider any investor’s specific objectives, financial situation, or particular needs and should not be construed as personalized advice. All investments involve risk, including the potential loss of principal. Strategies discussed may not be suitable for all investors and may change based on market, tax, or regulatory developments.
Before acting on any information contained herein, individuals should consult with a qualified financial, legal, or tax professional who can assess their unique circumstances.
