All one needs to do is to select a good company and make numerous purchases. The vagaries of the market will be smoothed out over time, and one can actually look forward to drops in a stock's price as buying opportunities. Keeping this in mind, there are two components involved. The first is regular purchases, and the second is ensuring that the selection of the company matches your investment criteria. Let's examine these separately.
Monthly purchases expose one to the market's volatility less than bimonthly or quarterly purchases.
The argument could be made that the purchase price will eventually even itself out, as one occasionally buys when the stock price is high, at other times when it is low. This is true, with the key being the number of purchases made. Our numbers showed that more frequent purchases expose you to less risk as measured by volatility. So, we see that the number of purchases made during the lifetime of the investment is one of the keys to the strength of the Drip, and this provides us with the first part of our answer as to how many to own. The benefit is derived through regular purchases, so people should certainly not hold more companies in their Drip portfolio than they can make regular investments into.