Stock Market · True or False
Is it true that holding only one stock is safer than holding many?
False. Concentration increases company-specific risk.
A single stock carries company-specific risk that diversification eliminates — one bankruptcy wipes out a concentrated portfolio but barely dents a diversified one.
Putting all your money in one company you love, forgetting that even the best companies can face unexpected disasters.
This scenario is one of 155 in the Skillful Stock Market track. Each card states a situation, you decide true or false, and the explanation follows immediately.
- Answer
- False
- Track
- Stock Market
- Topics
- diversification, concentration-risk
Also asked as
Is holding one stock safer than holding many? Why single stock portfolios are risky? Does owning multiple stocks reduce risk?
The scenario in full
Holding only one stock is safer than holding many.
Frequently asked questions
Is it true that holding only one stock is safer than holding many?
False. Concentration increases company-specific risk.
Is holding one stock safer than holding many?
False. Concentration increases company-specific risk. A single stock carries company-specific risk that diversification eliminates — one bankruptcy wipes out a concentrated portfolio but barely dents a diversified one.
Why single stock portfolios are risky?
False. Concentration increases company-specific risk. A single stock carries company-specific risk that diversification eliminates — one bankruptcy wipes out a concentrated portfolio but barely dents a diversified one.
Does owning multiple stocks reduce risk?
False. Concentration increases company-specific risk. A single stock carries company-specific risk that diversification eliminates — one bankruptcy wipes out a concentrated portfolio but barely dents a diversified one.
Where does this stock market question come from?
It is one of 155 scenarios in the Skillful Stock Market track. Each card states a realistic situation, you decide true or false, and the explanation follows immediately.
How do I practise more questions like this?
Start the Stock Market quiz. It runs about two minutes per session, the first 150 questions are free across every category, and your progress saves automatically.