: To prevent a single "bad egg" from tanking your entire portfolio, many experts recommend that no single stock position should ever exceed 5% of your total portfolio value.
Position sizing is the process of deciding how much capital to allocate to a single investment. This is arguably more important than the actual stock choice because it dictates how much you lose when a trade fails. how much stock to buy
There is a trade-off between holding too few stocks (high risk) and holding too many (difficulty in outperforming the market). : To prevent a single "bad egg" from