Concentrated Positions

Understanding different aspects of concentrated positions can help you better manage your portfolio

What Is a Concentrated Position?

An executive is compensated in company stock, or a business owner sells a company and receives proceeds in stock. These are just two of the situations that can result in a concentrated position—an allocation of 10 percent or more to a specific security or asset group.

Often concentrated positions can be instrumental in building wealth. Yet they can also have a devastating effect on a portfolio if it underperforms, as experienced by holders of internet and technology stocks in the early 2000s and real estate investors in 2008.

Therefore, investors often look for ways to:

  • Reduce a portfolio’s concentration risk
  • Optimize the tax efficiency of a portfolio
  • Manage concentrated positions through key strategies

To learn more, download your free guide on what to consider regarding concentrated positions.

Download Our Free Guide (PDF)

Wells Fargo Investment Institute, Inc., is a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.