Ever think of how many mutual funds you really need in order to have a diversified portfolio?

Mary Rowland, who is a personal finance expert and the author of The New Commonsense Guide to Mutual Funds, says that three is probably the minimum number needed in order to achieve solid diversification and 12 is at the outer limit for a really hefty portfolio. In truth, it's pretty much a given that the larger the portfolio, the more funds you will have. In fact, according to Mutual Fund Investors Association, one-third of their subscribers with portfolios of $1 million or more owned 15 to 19 funds. Of course, this goes back to the 1990s raging bull market. I understand that today we are probably looking in terms of four funds that the average mutual fund investor owns.

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