What is the maximum % of your portfolio would you allocate to one stock, and why? - Seedly
 

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Asked by Bjorn Ng

Asked on 09 Dec 2019

What is the maximum % of your portfolio would you allocate to one stock, and why?

What's your thought process behind allocating a large % of your portfolio to one stock, and in what scenarios would you do this?

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Answers (17)

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Daryl Liao, Fti
Daryl Liao, Fti
Level 7. Grand Master
Answered on 09 Dec 2019

I think this answer really depends on individual but let me share my opinion.

Some sources recommend 10 stocks and 10% each. Maybe some as war chest.

im really picky for my portfolio so I have 5-6 stocks and it's abit heavier each stock.

The heaviest position being 35% of my portfolio As I kept averaging down when there was a short report.

In the winning habits of warren buffet and George soros, theres a part about you call that a position. Have a stake that's enough to move your portfolio. otherwise it takes many many right decisions to move the needle. But this is controversial. I had some sleepless nights too haha

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Bibiana
Bibiana
Level 7. Grand Master
Answered on 09 Dec 2019

10%!

Enough to make the position meaningful but not too much to represent a big risk to my portfolio!

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Kelvin Seetoh
Kelvin Seetoh, Founder at Kelvestor.com
Level 6. Master
Answered on 09 Dec 2019

Starting out, I was doing 5 - 10%.

After investing for 8 years, I am comfortable doing 30 - 40% at maximum!

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Goh Wei Choon
Goh Wei Choon
Level 3. Wonderkid
Answered on 09 Dec 2019

5%. Diversification.

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Wallace Chai
Wallace Chai
Level 9. God of Wisdom
Answered on 09 Dec 2019

15% is my max! Cuz no matter how confident you are, sometimes blackswan still happens. This is to protect your downside.

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Yuki Fong
Yuki Fong
Level 3. Wonderkid
Answered on 09 Dec 2019

5%, to achieve risk diversification

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Frankie Aufhauser
Frankie Aufhauser
Level 7. Grand Master
Answered 2w ago

There are no strict rules, all depends on your risk tolerance.

And nobody, even professionals, can predict the course of a single stock, which is why

I (who still holds some stocks) discourage retail investors from buying single stocks.

Better stick with cheap and large ETFs, so you're much better diversified.

More of my thinking here: https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy

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Lim Chun Long Jimmy
Lim Chun Long Jimmy, Co-founder at PolicyWoke Pte Ltd
Level 6. Master
Answered on 19 Jan 2020

It depends on how many % of your investible capital you are prepared to lose per stock. Use diversification to your favour. If you risk x% of your investible capital for each stock, it takes all y stocks to become $0 to wipe out your investible capital:

  • x = 1, y = 100

  • x = 2, y = 50

  • x = 4, y = 25

  • x = 5, y = 20

  • x = 10, y = 10

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For me its 10-15%. It all depends on your ability to handle volatility and risk. As long as you are comfortable, can sleep well, that is important when investing.​​​

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Billy Ko
Billy Ko
Top Contributor

Top Contributor (Jan)

Level 7. Grand Master
Answered on 18 Jan 2020

At my given age where I am able to handle a higher level of risk, I'd allocate 50% on a stock that is more volatile to hopefully help me grow my money at a quicker pace

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pat
pat
Level 7. Grand Master
Answered on 17 Jan 2020

I will go for 3 industry with weightage of 40-30-30 , with 40 as my favoured industry

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 8. Wizard
Answered on 22 Dec 2019

About 10-15% for me. Unless I'm very confident about the stability of the stock and company management.

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Ernest Yeam Wee Leong
Ernest Yeam Wee Leong
Level 6. Master
Answered on 09 Dec 2019

I will choose 5%.

or you can copp STI index which has 30 stocks then you can allocate 3.33% for each stock

I write cool stuff about personal finance and money-saving hacks here.

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Choon Yuan Chan
Choon Yuan Chan
Top Contributor

Top Contributor (Jan)

Level 9. God of Wisdom
Answered on 09 Dec 2019

For me 50% is entirely possible. If you are convinced the stock has good managmenet and cash flow generating abilities

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T
Takadoshi
Level 3. Wonderkid
Answered on 09 Dec 2019

10% for me! No matter how confident am i with the stock, there will still be so many stuff that i cannot control. So i think 10% will the max. If i am wrong, i will only lose 10%.

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Wilson Nid A Break
Wilson Nid A Break
Level 8. Wizard
Answered on 09 Dec 2019

Maximum % to a single stock is not relevant in their early years of investing & constructing a portfolio, cos your first investment will immediately constitute 100% and subsequently get pared down as more news stocks get added. Think best is to focus on the absolute amount for each stock, as your porfolio size grew significantly down the road, then look at it by percentage

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It depends on my capital, risk appetite, and investment horizon.

If it is a stock that has a good business model and I don't need the money urgently, I'm pretty comfortable with 100% allocation.

Here is everything about me and what I do best.

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