Proponents of the three-fund or lazy portfolio say you don't.
Investing doesn't have to be complicated, according to Taylor Larimore, author of several books on investing. Simpler really is better.
A three-fund portfolio uses basic asset classes via three "total market" index funds: usually bonds, domestic stocks and international stocks.
One caveat: As you start nearing retirement, you'll want to make sure to have more than one investment account. A combination of taxable, tax-deferred and tax-free accounts is your best bet for maximum flexibility so you don't get hit with a big tax bill when you make withdrawals in retirement.
The pros of streamlining your portfolio is the simplicity. You have less to worry about and less to keep track of, says Ryan Mumy, a certified financial planner and founder of Mumy Financial Advisors.
Newcomers to investing can especially benefit from a less-is-more approach, Mumy says. "People often over-diversify early on," Mumy said.
The more funds you invest in, the more you'll pay in fees. Over time, fees have the potential to cut into your earnings.