Bonner & Partners Chief Analyst Chris Mayer is an exceptional stock picker. His recommendations helped readers beat the S&P 500 by 3-to-1 over a decade.

Below Chris explains why you never need more than six to eight stock positions to be successful…

From Chris Mayer, chief analyst, Bonner & Partners: Most people own way too many stocks. You can do well with as few as eight.

Bill and I are skeptical about the stock market. Stocks today aren’t cheap. And many of the tailwinds that helped drive the market in recent years are gone.

As I told Bill, we don’t need to find 100 stocks worth buying. We only need to find eight to 10 carefully chosen names.

There are over 5,000 stocks in the U.S. alone. Any analyst who can’t find just eight names worth owning is either incompetent or not working hard enough.

In this market correction, I’ve found some incredible buys: cash-stuffed businesses trading at deep discounts… irreplaceable trophy assets for a fraction of their true value… stocks with talented insiders who have lots of stocks and great track records…

All solid, safe picks for a family-office portfolio focused on preserving and building wealth. I’ll be revealing some of my favorite ideas in a special project I’m working on. (In fact, you’ll have a chance to front-run Bill on these.)

Research shows the benefit of adding more stocks is small after purchasing six to eight stocks in different industries. I’m not talking about owning eight mining stocks. But eight well-financed, cheap stocks in different industries would do the trick.

Ace fund manager Joel Greenblatt averaged 40% per year for 20 years. He said owning eight stocks eliminates 81% of the non-market risk of owning just one stock. (Non-market risk is the portion of a stock’s risk not tied to overall stock market movements.) “Overall market risk will not be eliminated merely by adding more stocks to your portfolio,” Greenblatt adds.

The best way to protect against market risk is to keep a portfolio with a mix of assets, as Bill does. He has a portfolio of cash, gold, and other investments. But whatever slice of your portfolio you decide to invest in stocks should focus on your best ideas.

Reeves’ Note: Last night, Chris hosted a training webinar that detailed his simple, effective method for investment outperformance. If you missed it, it’s not too late to learn the simple method he used to beat the broad market for a decade. Click here for the details.