Investors rarely hold individual securities, but rather hold collections of securities in various combinations called portfolios, typically in an effort to improve their diversification of that portfolio.

How many securities does it take to make a portfolio that can be considered to be as diversified as the overall market for those securities? In your answer, be sure to justify your answer from a financial and statistical standpoint.

Many mutual funds and investment portfolios contain hundreds, if not thousands, of individual securities in their portfolio.