Diversification of stocks is good but over diversification can be Dangerous
Almost many of us know that diversification of the investment money is a good thing.It provides better returns as well as protection from many diversifiable risks.But if you are overdoing it then it might hurt you more than giving benefits.
How simply suppose you are entering into investment and your amount of investment is $1000 which you tried to put into 20 different stocks in same industry like for auto sector.Which means around $50 investment in per stock.Now if it is giving your 10 stocks results in a profit of 10 % which means $5 as rate of return while other 10 goes for losses say about 10 % then it will also be $5 and you will earn nothing.Things might be more dangerous if losses are big.And if those 20 companies are highly correlated then this happens a lot.
You should try investing across various industries and sectors.