How to stay level headed?

[Hornet]

Thanks all for the helpful advice.

I think I did myself a slight disservice.Making a profit of some description was predicated on me correctly understanding the situation (if I correctly understood there was “definitely” some profit, the luck was in the level of profit and the risk was in me being wrong).

In terms of strategy I’ve more or less outlined it below, but basically 70% relatively safe investments (obviously I hope to beat the market on those but I’ll be over or under by a bit), 20% investments that make sense on average over the long term but with more risk involved and more decision-making, and 10% where in principle I could consider doing this sort of thing. Still figuring out how I want to use the money that I’ve pidgeon-holed into those categories though.

Diversification - how many stocks is too many?

I’m new to investing, but I think my long term approach will be to divide the money I put in, and the returns, in roughly this way: 40% in a few ETFs - most in relatively standard fare subject to good due diligence on my part, and then maybe a quarter of it in a slightly more conviction-driven direction. 30% spread across a maximum of 10 somewhat diverse, equally weighted stocks where the long term fundamentals look good and where I understand at a base level how they make their money and why …

I guess a better way of asking my initial question was, when you’re doing something a bit risky, how do you go about judging the risk-reward ratio when the risk factor is ultimately how confident you are that you’re right.