Risk
What is Concentration Risk?
Too much money in one stock, sector, or asset type
Full Explanation
Concentration risk is when too much of your portfolio is tied to one thing. If 60% of your money is in one stock and it crashes, you're in serious trouble. Diversification is the antidote.
Real-World Example
Employees who had most of their 401(k) in Enron stock lost everything when it collapsed.
Pro Tip
Even if you love a company, cap it. No single stock should dominate your portfolio.
Related Risk Terms
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