It’s not uncommon for investors to hold a large amount of one company’s stock. Maybe it’s from years of working at the company, an inheritance, or simply strong performance over time.
While it may feel good to see so much value tied to one name, concentrating too heavily in a single stock can be risky.
If most of your wealth depends on one company, your financial future rises and falls with its fortunes.
Even the strongest companies can face setbacks, and one bad earnings report or market shift could wipe out years of gains. Single stocks can swing widely in value. That volatility can create stress and make it harder to stay disciplined during market turbulence.
Often times, there is a personal connection to the concentrated position that can skew your confidence in its performance. Th