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How do you know if your portfolio is too concentrated?

"Diversify" is common advice, but nobody tells you how to check whether you actually are. Counting how many stocks you own doesn't answer it.

1. Look at weight, not count

You can own twenty stocks and still effectively own one, if a single name is 60% of the total. The first check is simple: what percentage is your largest holding, and what do your top three add up to?

2. Sector tilt — the hidden overlap

Eight different tickers that are all semiconductors is not diversification. Stocks in the same industry move together on the same news. Add up your weights by sector, not by ticker.

3. The next layer — hidden correlation

Even different sectors can be tied to the same driver — rate-sensitive names move together regardless of sector. Perfect diversification isn't achievable, but you can check whether every holding rides on a single story.

4. Concentration isn't automatically bad

A concentrated portfolio is more volatile, but it can be a deliberate choice when conviction is well-founded — several well-known investors' 13F filings are highly concentrated. The problem isn't concentration; it's unintentional concentration. A risk you've chosen is different from one you haven't noticed.

TICKR shows your top weights and sector distribution. It won't tell you what to buy or sell — it shows you where you currently stand.

FAQ

Is there a maximum sensible weight for one position?

There's no universal number — it depends on your time horizon and risk tolerance. What matters is knowing whether that weight was intentional.

Can an ETF be concentrated too?

Yes. Market-cap-weighted ETFs often have a large share in a handful of top names. Check the actual weights, not the fund's name.

See how concentrated your portfolio really is — free in TICKR.

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General educational information — not investment advice or a solicitation to trade. Quotes may be previous close (delayed).