Investing term

What is Position size?

The fraction of the total portfolio invested in a single holding.

Position size is how much of your total portfolio sits in a single holding, usually expressed as a percentage. It's one of the most important risk decisions you make: even a great idea can hurt you badly if it's oversized, and a bad one barely registers if it's small. Sizing positions to your conviction and to the damage a wipeout would do is core to survival.

For example

Capping any single stock at 5% of your portfolio means even a total collapse of that company costs you 5% — survivable, not catastrophic.

Position size is taught hands-on in Stage 16 — Portfolio Construction.

See the lesson →

Related terms

Broad ETFAn ETF that tracks a wide market index — total US stock market, total international, total bond market.Concentration riskThe risk that one position, sector, or country represents enough of the portfolio that a single bad outcome dominates returns.RebalanceSelling some of what's grown most and buying more of what's grown least to return the portfolio to its target weights.RegionA geographic grouping of equity exposure — US, developed-ex-US, emerging markets, etc.
← Back to the full glossary