Why some index funds don’t provide the stock market diversification you need

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How many stocks are needed for an investment portfolio to be truly diversified? Diversification is crucial to balancing investment risk and reward. A recent clue about how difficult it is to achieve adequate diversification came in a MarketWatch story about how just two stocks — Apple (AAPL) and Microsoft (MSFT) — were responsible for an outsized portion of the S&P 500’s (SPX) gain in 2019 and also over the past decade.

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