Mercer Advisors Logo

The Pros and Cons of the Highly Concentrated Position

Doug Fabian

Senior Vice President


Many people have an overabundance of wealth tied up in what’s commonly called a “highly concentrated position.” This is basically an asset on your balance sheet that represents a large portion of your net worth.

Some common examples of a highly concentrated position include: A personal residence that you own free and clear, a business that you own outright or are in partnerships with others, an individual stock or mutual fund that has grown large enough to represent more than 10% of your investment portfolio, or stock options in a single company.

Whatever type of highly concentrated position you may have, these can be both a blessing and a curse.

In this episode of the Science of Economic Freedom, “The Pros and Cons of the Highly Concentrated Position,” we discuss the advantages and disadvantages of these situations. And, we do it through the lens of helping you achieving and sustain economic freedom.

Topics covered in this episode include:

  • The long-term risks of a highly concentrated position
  • Being “house rich and cash poor”
  • Business ownership, partnerships and how to plan for the future
  • The need to avoid selling at a deep discount
  • The tax advantages and disadvantages of the highly concentrated position
  • How to assess your personal balance sheet and identify highly concentrated positions
  • Plus, much more…