Why you probably own too many stocks

Investment portfolio diversification is right up there with motherhood and apple pie. The reason for this particular discussion about diversification is that a number of large actively-managed mutual funds are currently making outsized bets on just a few prominent stocks. Consider four of the largest actively managed U.S. stock funds at mutual-fund giant Fidelity Investments: Contrafund (FCNTX) ; Blue Chip Growth (FBGRX) ; OTC (FOCPX) , and Magellan (FMAGX)  As you can see from the accompanying chart, their recent average allocation to five popular stocks — Alphabet (GOOGL) , Amazon.com (AMZN) , Apple (AAPL) , Facebook (FB)  and Microsoft (MSFT)  — was almost double the weight those stocks have in the S&P 500 (SPX)  itself. Read More...