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The difference between ETFs and stocks is volatility. ETFs will roughly follow (or slightly outperform perhaps) the market/sector average, but stocks have more volatility, so there is potential for good growth if one stock jumps. However, the more your stocks are diversified, the less effect a good stock will have on your bottom line and the closer you will be to the market average. (Obviously you also want to have enough to minimize risk). For example, you have R50,000 to spend and you buy 5 stocks at R10,000 each. Four mimic the market and return 20% in the first year and one has a freak 100% return. You have made R18,000 profit. But if you had used your R50,000 to buy 20 stocks of R2,500 each, and 19 mimic the market (20%) and there's the one freak 100% return. You only make R14,750 profit. Thus, the more diversified, the less effect a good stock has on your profit. There is an exponential decrease in risk as the number of stocks increase. Past a certain point (20 shares), even doubling your number of stocks to 40 only decreases risk by than less than 1%, but you have lost your overall volatility. Above 20 stocks and you're better off doing only ETFs, since statistically, your portfolio will exactly mimic the market, and ETFs slightly outperform the market average. Therefore, roughly 10 - 15 stocks is the perfect mix between risk and volatility for buy & hold investing, or even less (maybe 10 stocks) if you have a couple of ETFs as well to balance out the risk. I'm slightly older and closer to retirement than many investors on this forum, so I prefer less risk (and less volatility), and thus have more stocks in my portfolio. Thus, I have 40% of my total portfolio in 10 ETFs and 60% of my portfolio in 15 stocks.