Why does Smartfolios recommend investing in a basket of stocks rather than in an individual company?

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We are of the view that one should always look at portfolio returns instead of individual stock returns. This is simply because there could be a few companies doing exceptionally well, while some may be fairing poorly. As an investor, what should matter is whether your overall portfolio presents a decent return on investment. And in this regard, baskets of stocks are less risky than an individual company as it diversifies risk.