You know you should diversify. You've heard the advice a hundred times. But that one stock — whether it's your employer, an early investment that grew, or a position you inherited — it's done so well that selling feels like a mistake.
So you hold. And hold. And what started as a smart investment gradually becomes an outsized bet that could define your financial future in ways you didn't intend.
This is one of the most common and most dangerous patterns we see at Bayworth Capital. People with concentrated positions who intellectually understand the risk but emotionally can't bring themselves to address it.
How Concentration Creeps In
Nobody sets out to put 40% of their net worth in a single stock. It happens gradually. The company does well. The position grows. Other investments don't keep pace. And one day you look at your portfolio and realize one holding has quietly become the foundation of your entire financial picture.
For tech executives with equity compensation, this happens even faster. RSUs, stock options, and ESPP shares can create massive concentration without a single purchase decision. The stock was given to you, and now it dominates your portfolio.
The question isn't whether concentration can create wealth — it obviously can. The question is whether you're comfortable with that same concentration potentially destroying it.
What 15% Really Means
Financial professionals generally flag any single position above 10–15% of a portfolio as concentrated. That's not an arbitrary number. It's the threshold at which a single stock's decline starts to meaningfully impact your overall financial picture.
If 15% or more of your portfolio is in one stock and that stock drops 50% — which individual stocks do regularly — your entire portfolio just lost 7.5% or more from a single position. That's not volatility. That's structural risk.
And it's not just the downside. Concentrated positions create tax complexity, estate planning challenges, and emotional decision-making that affects everything else in your portfolio.
The First Step Isn't Selling — It's Seeing
We're not going to tell you to sell everything and diversify tomorrow. That's simplistic advice that ignores tax consequences, personal conviction, and individual circumstances.
But we are going to suggest that you start by getting a clear picture of where you stand. That's what the Executive Wealth Brief does. It's a free, two-minute diagnostic that evaluates your Market Exposure — including concentration risk — alongside your Tax Position, Income Picture, and Risk Coverage.
One of the ten questions asks directly about concentration. Your answer, combined with the other nine, produces a score that tells you whether your overall exposure is well-managed, needs some attention, or requires a closer look.
No email. No advisor pitch. Just an honest reading of where you stand.