The performance of undiversified portfolio in Indonesia stock exchange

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4 Citations (Scopus)


This research is aimed to analyze the diversification practice among domestic retail investors at the Indonesia Stock Exchange (IDX) and its portfolio performance. An individual domestic investor at IDX holds 4.3 stocks on average with the median two stocks. This is far from the minimum number of stocks required for the diversification purpose. But, this finding is in line with the findings of Goetzmann & Kumar (2008), Kelly (1995), and Polkovnichenko (2005). For the performance, without considering risk, minimum diversification with five stocks or fewer and moderate diversification with six to ten stocks in the portfolios tend to be better than the extensive diversification. However, when risk is taken into account, the undiversified portfolios do not outperform the extensive diversification.

Original languageEnglish
Pages (from-to)1041-1048
Number of pages8
JournalJournal of Applied Business Research
Issue number4
Publication statusPublished - 1 Jul 2016


  • Diversification practice
  • Portfolio performance
  • Retail investor
  • Undiversified portfolio


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