Q: Is it possible to have too many shares of one stock in a portfolio? – W.L., Worcester, Mass.

A: Pay little attention to the number of shares. What really matters is the total value of your stake in each company, and how it relates to your total portfolio value. There isn't much difference between owning 1,000 shares of a $10 stock (total value: $10,000) or 200 shares of a $50 stock (total value: $10,000).

Don't let any single stock grow to represent a large percentage of your portfolio, though, because it's risky to be over-concentrated. If 25% of your portfolio is in the stock of a single company and that stock takes a dive, your portfolio will be hit hard. But it can also be counterproductive to have your money spread across too many companies: If you have only 1% of your portfolio in a stock that triples in value, it won't make a huge overall difference. Focus your money on your best ideas. For many people, 10 to 20 stocks is a good number of holdings – enough for diversification, but not more than you can keep up with.

Q: I'm thinking that since I'm single, I don't need life insurance. Right? -- B.D., Warren, Ohio

A: Generally, true: The purpose of life insurance is to protect anyone who depends on you financially. The classic example is children, and it's smart to carry term life insurance from their birth to when they can be financially independent. Your spouse or your parents may also depend on your income, as might a family business. If your funeral expenses can be paid for and no party would be financially hurt if your income disappears, you can probably do without life insurance.

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Fool's School

ETFs for dividends: If you want dividend-paying stocks for your portfolio, you could study the vast universe of stocks and find great ones on your own, or you could plunk your dollars in one or more dividend-focused mutual funds (which often have the word "income" in their names). Another good option is investing in dividend-focused exchange-traded funds (ETFs), which are like a cross between mutual funds and stocks – funds you can easily invest in through most brokerages. Here are some top dividend ETFs to consider:

ProShares S&P 500 Dividend Aristocrats ETF (NOBL). This ETF holds the stocks in the Dividend Aristocrats index, limited to companies with at least 25 consecutive years of dividend payments – and dividend increases. The ETF recently sported a five-year average annual return of almost 9.6% and yielded 2.3%.

Schwab U.S. Dividend Equity ETF (SCHD). This ETF tracks the Dow Jones U.S. Dividend 100 Index by holding the same stocks. That index focuses on companies that have paid dividends for at least 10 consecutive years, and only includes those that seem healthy, with meaningful dividend yields and dividend growth rates. The ETF recently sported a five-year average annual return of 10.6% and yielded 3.4%

Vanguard High Dividend Yield ETF (VYM). This ETF tracks the FTSE High Dividend Yield Index, which includes many U.S. stocks with above-average dividend yields. Since a high dividend yield is often due to the stock price having fallen, focusing on high yields tends to fill the index with relatively undervalued stocks, including many from the financial services, health care and consumer defensive sectors. The ETF recently sported a five-year average annual return of 6.6% and yielded 3.6%.

Remember that simply investing in a low-fee, broad-market index fund that tracks the S&P 500, such as the SPDR S&P 500 ETF (SPY), will also deliver growing dividend income. That particular ETF recently sported a five-year average annual return of almost 11.6% and yielded nearly 1.6%.

Learn more about ETFs in the "Investing Basics" nook at Fool.com.

My dumbest investment

A Drugstore.com disaster:

My father died and left me a life insurance policy worth $7,000. I saw that Paul Allen, owner of the Seattle Seahawks and one of the people who started Microsoft, was a backer of Drugstore.com, and that Melinda Gates, Bill's wife, had joined its board. I figured that such rich people would know a good business when they saw it. I bought $7,000 worth of stock in the company, and within months had lost much of that. That kept me from investing for a while, and I'm just now getting back into it. – G., online

The Fool responds: We're glad you're getting back into investing in stocks, because there are few better ways to build wealth. Stock investors do need to expect volatility, though, and some investments that crash. The trick is to have your winners more than make up for your losers.

Drugstore.com, launched in the late 1990s, seemed to have a lot going for it back in its early days, as it had top-notch venture capital backers. It also struck a deal to get business through Amazon.com, which owned a stake in it, and Amazon.com founder Jeff Bezos joined the board of directors as well.

But all that wasn't enough. The company was purchased in 2011 by Walgreens, which shut it down in 2016. (Interestingly, Amazon.com is now expanding into online pharmacy and health care services.)

Foolish trivia

Name that company: I trace my roots back to 1873, when the Widows and Orphans Friendly Society was founded, aiming to offer protections to working people. Early offerings included coverage for illness and accidents, old-age pensions and burial funds. The 1918-1919 influenza pandemic cost me more than $20 million in claims. Today, with a market value recently near $32 billion, I'm a global financial powerhouse, recently managing more than $1.5 trillion and serving around 50 million customers in more than 40 countries. I offer life insurance, health insurance, annuities, retirement accounts, workplace benefits and more. My symbol is a geological formation. Who am I?

Last week's trivia answer: I trace my roots back to Baltimore in 1889, when a 25-year-old fellow named Willoughby launched me in a basement and began selling spices and extracts door to door. Over the years, I've offered cream of tartar and food colorings; "blood purifier," castor oil, cold cream, liver pills, talcum powder, tooth powder and witch hazel; and ammonia, birdseed, flypaper and roach traps. Today, with a market value recently near $25 billion, I boast brands such as French's, Frank's RedHot, Stubb's, Old Bay, Lawry's, Zatarain's, Kohinoor, Club House, Aeroplane and my own name. Who am I? (Answer McCormick & Company)

The Motley Fool take

A promising pipeline: Some investors lost interest in biotechnology company Vertex Pharmaceuticals (Nasdaq: VRTX) after it discontinued a clinical trial, but there's still a lot to like about the company

It has a big opportunity treating cystic fibrosis (CF) with its newest blockbuster CF drug, Trikafta, which is launching as Kaftrio in parts of Europe and should meet pent-up demand. The company's other CF drugs may also win approval to treat younger children and patients with additional genetic mutations, giving it a clear growth runway for years to come.

Meanwhile, Vertex has clinical-stage programs in five other disease areas. One of those programs, VX-864, targets the genetic disease alpha-1 antitrypsin deficiency. Vertex's pipeline also includes promising therapies targeting rare diseases such as sickle cell disease, beta thalassemia and focal segmental glomerulosclerosis (FSGS); several of these programs have important data readouts on the way by the end of next year. The company also hopes to advance its Type 1 diabetes candidate into early-stage testing in 2021. CEO Reshma Kewalramani has noted, "not all of the molecules will succeed," adding, "not all of them have to."

Finally, Vertex ended its third quarter with cash, cash equivalents and marketable securities totaling $6.2 billion, giving it a lot of financial flexibility for additional deal-making. This is a company worth watching -- or investing in. (The Motley Fool has recommended Vertex Pharmaceuticals.)

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