Limit stock exposure below 10% to cut portfolio risk
Even great stocks can drag your portfolio if you overconcentrate. Allocating 50% to just 2/3 stocks increases risk, and losses in those can outweigh gains elsewhere. Smart investing isn’t just about picking quality stocks, it’s also about spreading capital wisely. Limiting exposure to below 10% per stock keeps your portfolio balanced and reduces the impact of any single underperformer.