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on blog few labels ,catagories are good or more labels catagories

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sm
from india |

every blog has labels,index ,catagories, i wanted to know is it good to have lot of labels,catagories or  few  labels catagories on side bar, as well as below each post.

does more labels help more visitors read or stay on blog ?

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sm
from india |

yes ,can this happen

is there any limitation like one should not have more than 15 labels or 5 labels. etc on blog or what is maximum limit