Concentration risk

Do you set a limit on how much a single position can take in your portfolio? I try to keep individual position size to <20% of stock portfolio and preferably half that.

Though sometimes it creeps over. Today, I bought more stocks of BTI which is now my top holding at 16%.

I try to limit the max. single position to 10% (of the total stock+ETF portfolio, excl. 3a etc.), but have often failed to do something as letting the winners run is oh-so-tempting. Usually such winners have fallen back to under 10% by themselves :triumph::roll_eyes:

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I actu

I have something similar. 10% is a soft-limit allowing positions to run to 20% which is a harder cap and then I would start selling to stay under the 20% limit.

I hear you on letting ‘winners’ run. I even had one case where I’d bought options as downside protection, but instead of following my plan and cashing in, I got greedy doubled down and then the stock tanked by 50% :man_facepalming:

More sensible. My 8th biggest holding is just 3.9% and that holding and all smaller holdings represent >50% of of the portfolio.

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2% of the passive income it generates for me (at purchase time), allowed to go to … I dunno … probably not a problem for my strategy. :slight_smile: