FAQs Frequently Asked Questions
Market Lab Report
How do you divide the amount you use for each stock or ETF allocation and subsequently add to each of these positions? Do you have an example so as to not get too heavily weighted in one position ?
It all depends on one's tolerance for risk as this is tied to money management of one's own portfolio. Every investor must find their own risk tolerances and position size accordingly.
Some may wish to have a higher exposure to stocks than to ETFs, as market conditions change.
Some prefer to be concentrated in just a few positions while others prefer more diversification by holding several or more names.
If you have a big gain in a stock that you have pyramided, it might represent a large portion of your portfolio. So depending on your tolerance for volatility, you may wish to scale some of it back.
First published: | 3 Oct 2010 |
Last updated: | 5 Apr 2012 |