i think the utility of further diversification becomes pretty low after you have around 30 stocks in a portfolio. assuming those 30 stocks are actually diversified and are not e.g. 30 tech companies, or 30 companies in the UK.
There's a lot to be said in favour of investing into a low cost ETF that attempts to passively approximate the distribution of stocks as they appear in the market.
I think there are potential advantages to selecting stocks or weighting stocks according to criteria other than market capitalisation (unlike passive investment approach) but most people who try to do that do worse than a passive approach.
A passive investment approach like putting money into VT ETF depends upon some fraction of market participants doing the work to actively set market prices. If enough of the market goes nuts and bids up the price of some security far above its actual value (e.g. IPOs for businesses that run at a loss with no obvious path to making a profit) then the downside of a passive approach using market capitalisation as weights is that you will invest some tiny fraction in these companies with irrationally inflated market caps.
Part of it is also a question of how much time and mental energy you want to put into learning about how to value companies and investigating options for investment. Investing in 30 individual stocks vs 1 ETF also creates about 30x as much work at tax time...
