How much should I have in one stock?
"How much should I have in one stock?" is one of the most-searched portfolio questions, and it almost always gets answered with a number: 5%. 10%. Never more than X.
The honest answer is that the number depends on things the rule-of-thumb crowd never asks you about. A 25% position in a stock you understand deeply, hold with conviction, and can afford to lose half of is a defensible bet. A 12% position you backed into through an employer grant, in a company whose fortunes are tied to your own paycheck, that you'd have to sell at the worst possible moment if a goal came due — that smaller position is the more dangerous one.
Aurvus was built by a trader who has spent decades watching position sizing decide outcomes. Here's how to think about your own single-stock limit — not as a rule someone hands you, but as a policy you set on purpose.
Why single-stock limits matter more as your wealth grows
When you have $50,000 invested, a big single position is a learning experience. When you have $1.5 million and a goal that depends on it, the same percentage is a different kind of risk — because now the dollars are large enough to change your life if they go the wrong way. The percentage that's "fine" shrinks as the stakes rise, because your capacity to recover from a bad outcome shrinks. A 30% drawdown on a position is an abstraction at $50K and a postponed retirement at $1.5M.
The common guidelines — and what they're for
The 5-10% single-stock rule, the 25-30% sector cap — these exist for a reason. They're guardrails for the accidental case, the default for someone who hasn't thought it through. If you have no specific reason to concentrate, defaulting to "under 10%" is sound. The guidelines are a floor for thoughtlessness, not a ceiling for conviction.
The exceptions that swallow the rule
Real portfolios are full of legitimate reasons to break the guideline:
Founders and early employees holding equity in a company they built and understand better than any analyst.
Concentrated equity compensation — RSUs and options that vest into a large position you didn't "buy" so much as earn.
Legacy positions with enormous embedded gains, where selling triggers a tax bill that's its own consideration.
Genuine high-conviction bets in something you've researched deeply.
None of these are automatically wrong. What makes them safe or dangerous is whether you've examined them — whether the concentration is a decision or a default.
Building your own single-stock policy
The right move isn't to adopt someone's number. It's to write your own, based on:
Your goals and their timelines. Money you need in three years can't ride on one stock. Money you won't touch for twenty has more room.
Your real risk capacity — not your tolerance for excitement, your actual ability to absorb a loss without derailing a goal.
Your conviction and understanding — earned through research, not borrowed from a forum.
The tax reality of trimming.
A written policy turns "am I crazy for holding this much?" from an anxious gut-check into a decision you can defend to yourself.
How to diversify without a tax shock
If you decide a position is too large, the instinct is to sell — and the tax bill on a big winner can be brutal enough to freeze you into inaction. The sophisticated approaches are gradual: trimming over multiple tax years, prioritizing tax-advantaged accounts, directing new contributions elsewhere so the position shrinks as a percentage even if you never sell a share. (Rebalancing without a tax bomb is its own discipline — worth its own deep dive.)
The bottom line
There is no universal right answer to "how much in one stock," and you should be skeptical of anyone who gives you one without knowing your goals, your taxes, and your conviction. The right number is the one you set deliberately and can defend.
Aurvus shows you exactly how much of your portfolio rides on each position — including future vesting if you hold employer equity — and lets you see how trimming or diversifying would shift your overall risk and your goal timelines, before you make a move you can't easily undo. See your single-stock exposure.
Aurvus provides portfolio analysis for informational purposes and is not a registered investment advisor. Consult a qualified professional about your specific situation before making investment decisions.
