Absolutely. Some of the comments prior to yours reveal a lack of understanding of what diversification means in the context of share portfolio management.
Firstly the point is the aim is to diversify risk. Be clear what you are diversifying!
Secondly buying several stocks that for one reason or other are correlated doesn’t diversify risk. By correlated I mean if two stocks always move up and down in tandem you don’t diversify risk. Often people who are buying some themed ETF’s are doing precisely this: putting all their eggs in one basket. This ‘eggs in basket’ metaphor is perhaps a reasonable one. You want several baskets. If you stumble perhaps one of your baskets drops but another one stays in your hands. You have ensured you will take some eggs home.
Thirdly buying several stocks in itself doesn’t diversify your risk because of market capitalisation. For example, I buy two shares. Share A is 1p. Share B is 1p. But share A represents only 0.0001% of the company, whilst B represents 0.01% of the company. I need to buy 100 shares of A to have a equally market cap weighted portfolio. This business of weighting has more to it and I have only touched the surface. But you can see the concept in play in index weighted Trusts/ETF’s.
Buying lots of shares may actually make your portfolio more risky not less. Some thought needs to go into the process. And yes investing in a few well researched undervalued stocks is a great idea. But be sure you know what undervalued means and importantly why the market undervalues the stocks you have found under the bushel. Plus plus be clear how long are going to wait for the market’s light bulb to go on.