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Representing Individual, High Net Worth & Institutional Investors

Office in Indiana


Home » Stockbroker Misconduct » Over Concentrated Portfolios

Over Concentrated Portfolios

Investment portfolio diversification is the most fundamental rule of investing. The opposite of a diversifed investment portfolio is an over concentrated investment portfolio. Overconcentration may be indicated when a stockbroker invests a large portion of a client's investment portfolio into a single investment or sector of the market or asset class. An example of overconcentration includes an investment portfolio that contains only automobile stocks. A stockbroker who fails to sufficiently diversify a client's investment portfolio substantially increases the risk of potential investment losses.

Simply put, placing all your “eggs” in one basket is never a wise investment decision. Ultimately, overconcentration can lead to liability on the part of the stockbroker or the investment firm. For a free initial consultation regarding your securities claim, contact Mark Maddox at 800-505-5515. Or, fill out the contact form on this Web site to obtain candid legal advice.

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