Evening Straws , diversification for me is more about having exposure to a few sectors in which companies offer :

1. superior growth rates in revenue within their sector abd when comapred ot the broader market,
2. low levels of debt
3. are in sectors growing at superior rates compared to the market broadly.
4. Management have Skin in the game fand
5. history of prudent use of capital is key
6. Reasonaby priced campred to sector and market

In respect to large cap v small or medium . Small to medium is the preference in seekign market beating returns.

I am sure there a few more elements to factor when building a portfolio. 

From there simply ride the thesis and allow compounding t do its thing 

After ~8 or 10 stocks, the benefits of diversificaion drop significantly (research indicating so)

At around 18, adding more stocks makes near zero difference to volatility in portfolio. 

This is factoring in the stocks vary in industry/location of operations/size etc

So question is: why diversity?

If it is to smooth out volatility. 8 to 10 stocks is good.

If its to hedge bets as your low conviction, maybe go 15 - 20.

Personally I am of the opinion we are at start of commodity super cycle & inflation is here to stay due to increase in money supply etc. So I'm going hard on commodity/resource.

I have diversification across a range of metals and minerals.

I then have an allocation of around 30% to ETF's in Tech & emerging markets etc. Fields i know i have zero edge in.

My industry super is 100% stocks too, so have a large chunk allocated to big caps there that has about 30yrs to compound.

As a new investor I wanted to get a collective idea of other investors strategies when it comes to balancing your portfolio.

Fundamentally we need to consider the type of investment strategy we are going to employ before we look at the diversification of our portfolio (or am I wrong making a statement like that?), as our approach is going to differ when determining how long we are looking to hold a stock.

When we talk balance and diversification what do you essentially look to do?

 
~ Sectors

~ Small cap, big cap 

~ Combination of both

Interested to hear from those who have more wisdom than I in this process.