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Beginners in the share market are typically guilty of over-investing in two ways - either they put too great a percentage of their available funds into a single trading idea, or they commit more money to an investment than they can cope with emotionally. As a general rule of thumb you should aim to have a spread of between five and eight different companies in your portfolio to minimise risk. Having more money in an investment than you can cope with emotionally results in a failure to execute stops when they are triggered.

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