Putting 90 % of your savings into less than 10 stocks is extremely risky.
If you don't know much about how markets work and stock picking strategies, go with mutual funds / index funds. You may not beat the market but you will be ahead of inflation.
If you are confident in picking stocks and want to invest in individual stocks, invest in at least 15 to 20 stocks, across different sectors. This will diversify your risks enough, without diluting your returns too much.
This is what my portfolio looks like:
- 40% in safe instruments (bank fixed deposits,etc.)
- 10% in mutual funds/index funds (SIPs to take advantage to dollar cost averaging)
- 50% in individual stocks (over 30 stocks across different market sectors)
With this, I am certain that if tomorrow market crashes (you never know), all of my savings won't disappear.
This is still quite concentrated though, considering that 60% of my money is in stocks. Ideally, you should diversify across market instruments as well.
I feel like the stock market goes up over time so unless something like 2008 depression happens again there is actually not that much risk
You are right in that over a 30 year time period, market will go up. But that's for the entire market, not every individual stock. You are also wrong in thinking that another crash like 2008 won't happen again. Historically, major crashes like that of 2008 have happened roughly once in every 10-15 years (we are due for one now). But minor crashes (10% drop) happen once every 1-2 years. No one, not even Warren Buffet, knows with 100% certainty what the market is going to do tomorrow. What do us, mere mortals, know ;).
The real question is, can you hold on onto your stocks (do you have enough confidence in your stock picking), even when they are down 50% because of any arbitrary factor?