Lesson 3: Position Concentration Risk. One stock should never be allowed to decide your year. Here is the math behind why.
Which portfolio carries more single-stock risk?
Trust your gut before we do the concentration math.
Assessment
Two 12-stock portfolios. In one, the biggest holding is 8% of the total; in the other, it's 38%. Which carries more single-stock risk?
Twelve names each 🤑 One of them is 38%.