Hey Sylvia, Quick Question: How Much of One Stock is Too Much of One Stock? (Video)

By Dr. Sylvia Kwan

Sylvia Kwan has nearly 35 years in the investing industry, as well as a PhD in engineering economic systems from Stanford, and she helped build Ellevest from the ground up as our Chief Investment Officer. So you could say she knows a thing or two about investing. We decided to bottle up some of that golden knowledge for you in our new video series, “Hey Sylvia, Quick Question.”

Up next: How much of one stock is too much of one stock?

Sylvia’s answer:

Well, at Ellevest, we believe that no more than 10% of your investment portfolio should be in a single company’s stock. Why? Because no one can consistently predict how a particular stock is going to perform in the future. So it’s important not to have too much of one stock in your portfolio.

Let’s say, for example, you had 75% of your portfolio in a single company’s stock. When the stock’s doing well, your portfolio is doing great, you’re feeling great. But what if the stock takes a dive? There’s a bad earnings quarter, there’s a scandal with the CEO, there’s a security breach at the firm. Your portfolio could significantly suffer as a result.

Now let’s say that same stock was only 5% of your portfolio and it takes a dive. Because it’s only 5% of your portfolio, your entire investment portfolio suffers less as a result.


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Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives, provide you with a given level of income or reduce portfolio risk.

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities, and should not be considered specific legal, investment, or tax advice.

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Investing entails risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.

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Dr. Sylvia Kwan

Dr. Sylvia Kwan is the Chief Investment Officer of Ellevest.