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

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. 

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