Not exact matches
As a form
of risk control, the portfolio construction process is designed to penalize high volatility in
stocks and avoid excessive
concentration in
single sectors
of the market.
Ben shares some ideas on options for investors who are sitting on large gains in their portfolio, with a focus on position sizing (rebalance when something gets larger than your targeted asset allocation), avoiding
concentration in a
single stock (specifically employer granted
stocks), the benefits
of diversification, and «reverse dollar cost averaging», whereby you gradually reduce your stake in highly valued equity by regular sales over a course
of several months.
To reduce
single -
stock concentration, the index employs a semiannual
stock cap
of 17.5 %.
Concentration in
single stocks is high with the top 3 holdings typically accounting for 50 % or more
of fund assets.
It's really a question
of concentration: would you prefer to have big
stock exposure to a
single industry that is generally safe, or a diversified mix
of bonds from companies in various industries that may be slightly riskier in the aggregate?
Yes, it's a complex system, but in terms
of the ability
of the ecosphere to support the current
stock of living beings, I think the system is pretty simple and can easily be monitored through observations
of a
single measure: the
concentration of CO2 in the atmosphere.