How Many Individual Stocks Should You Own As a Couple?

Don't put all your eggs in one basket, as the old proverb says, and that's certainly true in the world of investing. A properly diversified portfolio can protect you when trouble strikes a single company or sector and exposes you to the upsides of many. But how many stocks is the right number for you?

Well, a few years back, Motley Fool co-founder David Gardner and David Kretzmann, now head of Motley Fool Asia, came up with a formula that individual investors can use to guide them. But as they realized recently thanks to a listener query, that formula is based on one person investing on their own. Do married couples really need twice as many stocks? In this mailbag segment from the Rule Breaker Investing podcast, they reflect on how your matrimonial situation affects your ideal GKC score.

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This video was recorded on April 24, 2019.

David Gardner: Now let's move to a Gardner-Kretzmann Continuum element.

David Kretzmann: Excellent!

Gardner: Bob Hit has written in. He says, "Hi, I love the show, your services. You've helped me beat the market for several years. It's very liberating. The Gardner-Kretzmann Continuum is a neat concept." David, could you briefly explain the Gardner-Kretzmann Continuum one more time on the show?

Kretzmann: Sure! This is taking the number of stocks you own and divide it by your age. If you're 25 years old and you own 25 stocks, your Gardner-Kretzmann continuum score, or GKC score for short, would be 1. Typically, we recommend that people shoot for a GKC score of 1 or higher. Essentially, have the number of stocks in your portfolio match or exceed your age.

Gardner: Beautifully put! It's like you've done that before.

Kretzmann: We've rehearsed this over the past several months -- over the past year, even!

Gardner: [laughs] You particularly! You nailed that! Bob goes on, David, he says, "My wife and I both have IRAs. We have a joint brokerage account. Should we each strive to have a GKC of 1? Or should we count both of our ages? We're both 56, and I'm not sure we can adequately track 122 stocks. We currently have around 60 stocks and a few mutual funds. Thanks for all you do. Best regards, Bob Hit."

Your thoughts here on this enigma?

Kretzmann: I just love that Bob is asking this question! I don't think we've really thought through the implications of GKC.

Gardner: What's your instinct? I have an instinct here!

Kretzmann: Maybe split the difference. GKC + 50%.

Gardner: OK. The reason it's not just the G or the K is because we partnered. We talked this out. My own approach here, David, I think Bob's killing it right now. I would say, if you have a spouse or a partner, and you really feel like you're spouses and partners, like, you're one, which you're supposed to be when you unite your lives, I'd say that's one group, one portfolio. So, 60 over a 56 looks like a 1-plus GKC to me. But, you're right. You have a higher standard than I do generally think you have a higher GKC than I do as well.

​Kretzmann:​ I think I do.

Gardner: So it's not surprising you might suggest a 90 over their average age is around the GKC that you'd like them to shoot for.

Kretzmann: It definitely depends on the partnership or the couple that you have. If both stock pickers and researching the stocks, obviously, that can inch a little bit higher. But otherwise, yeah, sticking toward that one score is a good way to go.

Gardner: Context is so important, isn't it? You're adding some important nuance in there at the end, which is why I have you on the show.

Kretzmann: That's why I'm here!

Gardner: Yeah, nuance.