Craig Toberman breaks down the dangers of concentration risk in his latest feature on etf.com, “AI-Driven Market Selloff Shines Light on Concentration Risk.”
He explains how abrupt selloffs—like Nvidia’s recent plunge—create ripple effects across the market. Many investors don’t realize how a handful of high-performing stocks can disproportionately sway market-cap-weighted indexes, making portfolios far less diversified than they seem.
“The cap-weighting is concerning, so we recommend not putting everything into the S&P 500 and instead using a well-diversified global index as the core of a portfolio,” said Craig Toberman, partner at St. Louis, Missouri-based advisory firm Toberman Becker Wealth.
According to a recent Goldman Sachs research insight, the top 10 stocks in the S&P 500 index account for over 35% of the total market capitalization. Want to protect your investments from concentration risk? Book a call with our team today.
Disclosure: Any mention of a particular security and related performance data is not a recommendation to buy or sell. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Nothing on this website should be considered as personalized financial advice or a solicitation to buy or sell any securities.
Craig Toberman is a St. Louis financial advisor and Partner at Toberman Becker Wealth, a fee-only fiduciary firm specializing in retirement planning. The firm helps individuals and families coordinate their investments, tax planning, and retirement income in one financial plan. Craig and the team provide practical guidance for the transition from building wealth to using it throughout retirement.