Days to produce one new market-beating investment idea

This chart shows how many days you need to produce a new market-beating investment idea based on the no. of holdings in your portfolio and your average holding period. For example, if your portfolio has 15 holdings with an average holding period of 2 years, you’ll have to come up with a new investment idea every 50 days or 1 1/2 months.

Let’s assume most retail investors have roughly 20-30 holdings in their portfolio. And based on the information I can find online, the avg. holding period is around a year or less. That means one would have to produce a good investment idea every fortnight, without end.

By thinking rationally about how long you need to come up with a great idea, you can work ‘backward’ to figure out an investment horizon and a portfolio size that suits you. Once you’ve determined an ideal portfolio size, you can also use our diversity report to analyze your portfolio based on variables like market, sector, industry, or create your own custom group.

Let me know your thoughts.