In our judgement, 3 or 4 funds are enough to provide diversification. No additional diversification is provided by investing in more funds. The reason is that firstly, any well-managed fund is already diversified across different companies and sectors, thus providing optimum safety. Secondly, many times the stocks held by these funds' tend to be a similar set. With a larger number of funds you are effectively adding more funds similar to some other fund that is already there with you.
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