Question

What is a concentrated stock position and why does it matter?

Answer

A concentrated stock position is when a single stock makes up a large percentage of your total portfolio. Advisors may flag risk when one position exceeds 5%-20% of your portfolio. The concern is that your overall returns become dominated by one company’s performance, removing the protection that diversification provides. If that company struggles, nothing else in your portfolio may be able to absorb the hit.

About Mercer Advisors

We exist so you don’t have to worry about money. For more than 40 years, we’ve taken the sophisticated, time-tested approach that many ultra-high net worth individuals use to help manage their financial lives and made it accessible to more families.

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