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How to Diversify in a smaller portfolio?
I want to learn more about investing. I already have some knowledge about fundamentals, various ratios, how different sectors operate. Have been active in buying and selling stocks since about a year. But i emptied out my portfolio a few months back. Now I wish to slowly start making a new one. so I want to start out with a small portfolio like 50k or so. Mostly because I'm in college, I don't have enough time to properly invest and I'm not earning anything rn, so don't wanna invest more than 45-50k. So I am thinking of 2-3 years or more in a smaller portfolio, that i might increase over time. Risk appetite is about medium, but I'll not go into smallcap for now. How should I diversify my portfolio? I'm thinking about choosing 5-6 companies each from a different sector that I assume there would be growth in the upcoming quarters. And then dividing the capital all close to 10k per each company. 2 companies will be largecap, 1-2 next50 and maybe one or two in midcap depending on the sector and company. Is there something I need to change about this strategy? Ps: I had overdiverisified my old portfolio before. It was invested mainly all in nifty 50 but spread out across a lot of companies. Most of them were the top 10 of nifty 50. Also I felt there wasn't much growth potential at that moment and the indexes were dipping in December midway, so i emptied out that portfolio. I made the right choice as my capital would have been stuck and I would get no choice to liquidate and reinvest.3
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