How much of my portfolio in any 1 stock/ETF?

I’ve long subscribed to the theory of diversification of my investment portfolio, both in different sectors and in individual stocks/ETF’s. I’m wondering what others use as a “rule of thumb?” Currently, I calculate my average to be approx 6% per stock and am slightly heavy on resources (27% in oil/gas/gold). I wonder if that is a little high and perhaps should “spread the wealth” to better balance things.

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Asked on January 29, 2024 8:22 am

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Private answer

Hey there.
Ultimately this is going to be a personal decision. I know some who obsess about being properly diversified and won't allocate any more than 5-6% to a single equity, and I know some people who have 30-40% of their portfolio in a single holding.

For me, I typically aim to have my core positions (Foundational Stocks) make up anywhere from 4-6% while my smaller more speculative options be anywhere from 2-3%.

From there, the most speculative options in my portfolio are often max 1%.

You can see the overall composition of my portfolio here, which could give you an idea of the strategy I try to deploy.

https://www.stocktrades.ca/stocktrades-premium/dans-portfolio/

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Posted by Dan Kent

Answered on January 30, 2024 7:38 am

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