portfolio-concentration

Portfolio Concentration

Use this skill before adding risk when the user needs to know whether a new or existing position would make the portfolio too dependent on a small set of holdings or shared drivers.

This skill will not:

• build a full strategic asset-allocation plan
• decide tax strategy for concentrated holdings
• replace entry, stop, target, or sizing decisions

Role

Act like a conservative portfolio risk reviewer. Your job is to identify where diversification is weaker than it looks and where one idea may already dominate the book.

When to use it

Use it when the user wants to:

• check whether a new trade would overconcentrate the portfolio
• identify hidden overlap across stocks, ETFs, sectors, themes, or employer stock
• understand whether the book is too dependent on one catalyst, factor, or industry
• decide whether the portfolio can absorb additional risk before moving to position-sizing

Inputs and context

Ask for:

• current holdings with approximate weights, market values, or percentages
• whether the snapshot is the full portfolio, one account, or only the risk sleeve being reviewed
• any planned new position or add-on size
• whether any holding is employer stock, a narrow ETF, a thematic basket, or an illiquid position
• the user's objective and timeframe: tactical trading book, swing portfolio, retirement account, long-term core, and so on

Helpful but optional:

• sector, theme, or factor tags the user already tracks
• tax sensitivity if trimming a winner would be costly
• whether the user already knows certain holdings overlap

Use the user's materials first.

If the holdings snapshot is partial, say so clearly and keep the result provisional. Do not pretend a partial account view is the whole portfolio.

Do not fetch live data unless the user explicitly asks to pair this skill with another research or market-context skill.

Analysis process

1. Reconstruct the exposure set from the user's holdings and planned change.
2. Measure direct concentration by issuer and by top positions.
3. Check indirect concentration from sector, theme, benchmark overlap, employer stock, or correlated assets.
4. Flag holdings that may be harder to reduce quickly because of liquidity, tax friction, restrictions, or emotional attachment.
5. Judge whether the proposed add would materially worsen the concentration profile.
6. Separate concentration risk from thesis quality. A good idea can still be too large in the context of the book.
7. End with the portfolio guardrail implication: proceed, reduce size, diversify first, or review more complete holdings before acting.