Many investors believe portfolio performance is determined by picking the right stocks.
I believe position sizing is just as important.
A portfolio usually suffers its biggest losses not because of one bad investment, but because too much capital was allocated to the wrong idea.
That's why every position in my portfolio starts with one simple question:
How confident am I in this investment?
I Usually Hold 10–20 Stocks
Rather than placing all my capital into a few ideas, I typically hold between 10 and 20 stocks.
This provides diversification while still allowing my highest-conviction ideas to have a meaningful impact on portfolio performance.
Not every investment deserves the same allocation.
Small Conviction = Small Position
When I first identify an opportunity, I often start with a 2%–5% position.
At this stage, the company may have attractive fundamentals or technical momentum, but my investment thesis is still developing.
Starting small allows me to participate while limiting downside if the market proves me wrong.
High Conviction = Earn the Right to Add
I rarely build a large position immediately.
Instead, I prefer to let the market confirm my thesis.
If the stock continues to perform well, supported by healthy volume and constructive price action, I may add another position when it reaches the next support zone after a successful breakout or pullback.
In other words, I add to winners—not losers.
Each additional purchase is based on stronger evidence, not greater hope.
Maximum Exposure
Even my highest-conviction ideas have a limit.
I generally cap any single position at 20% of my portfolio.
This prevents one investment from having an outsized impact if my thesis turns out to be wrong.
No matter how attractive an opportunity appears, risk management always comes first.
Concentration Risk Is More Than Position Size
Risk isn't determined only by how much you invest in one stock.
It also depends on how your positions are related.
For example, owning five AI infrastructure companies may appear diversified, but if they all depend on the same AI spending cycle, they may behave like a single position during a market downturn.
That's why I also monitor sector and theme exposure, not just individual stock weights.
My Philosophy
Position sizing should reflect conviction—not emotion.
A high-conviction investment earns a larger allocation through continued execution and market confirmation.
By sizing positions according to conviction, adding only when the thesis strengthens, and limiting maximum exposure, I aim to participate in long-term winners while ensuring that no single mistake can significantly damage the portfolio.
Successful investing isn't only about finding great companies.
It's also about managing capital wisely.