Capital Management

Check Portfolio Concentration in 3 Minutes

By Walid Mograbi · 2026-07-28 · 2 min read

A practical three-step checklist to detect concentration risk across asset classes, within each class, and in liquidity before adjusting your portfolio.

Quick 3-minute concentration check

Use this compact checklist to see if your portfolio is too concentrated before making changes.

1) Review allocation across asset classes

• Check whether one class dominates your portfolio (for example mostly stocks, mostly bonds, or mostly cash).
• If your distribution is heavily weighted toward one class, risk tends to rise.

2) Review diversification inside each class

• Having multiple asset classes is not enough on its own.
• Ensure your stocks are not all from the same sector.
• Ensure your bonds are not all the same bond type or from the same issuer.

3) Review the liquidity of each investment

• Assess how quickly each holding can be sold.
• The harder an investment is to sell, the greater the risk of delay when you need fast cash.

Benefit of this audit

• These simple steps help you decide whether your portfolio is over-concentrated.
• They also help reduce the chance of large losses from one sector or one instrument moving sharply.

Concentration check card (3 questions before any portfolio change)

1. Is one asset class clearly dominant?
2. Are the same assets repeating across multiple holdings?
3. Is a large part difficult to sell quickly?

• If you can answer yes to one or more, you may be over-concentrated.

Rebalancing caution

• Rebalancing can create costs and fees.
• It may also have tax implications.
• Review the full impact first, then decide whether to act.