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Not investment advice. Educational reading. See Disclaimer.
L.2 · BEGINNER · 2 MIN

Position Sizing: How Much in Each Stock?

Position sizing determines how much of your portfolio goes into each stock. It is one of the most important decisions you make as an investor.

Quiz · 5 questions ↓
§ 01
MethodHow It WorksBest For
Equal weightSame dollar amount in each stockBeginners, maximum diversification
Market-cap weightMore in bigger companiesMirroring the index (what S&P 500 does)
Conviction weightMore in your highest-conviction ideasExperienced investors with research edge
§ 02

A common rule of thumb: no single position should exceed 10% of your portfolio for diversified investors. Professionals often cap at 5%.

§ 03
In the **Portfolio** view, try switching between weight modes: Custom, Equal, Price, Mkt Cap. Watch how your allocation changes.
§ 04

Position sizing is how you express conviction while managing risk. Big positions in your best ideas, small positions in speculative ones.

§ 05
Your single highest-conviction stock could plausibly lose 50% in a bad scenario. How should you size it?
Five questions · AI feedback

Sit with the ideas.

Your portfolio has 10 stocks. You invest $10,000 equally across all of them. Stock A doubles in value while the others are flat. What happens to your equal-weight allocation?

Why:
Try this in paper trading

Dollar-cost average for four weeks

Pick one ETF or stock you'd hold for 10+ years. Paper-buy the same dollar amount of it once a week for four weeks — same day each week. Journal what you noticed about the rhythm of the discipline.

Open paper portfolio →

Practice mode — simulated trades, not investment advice.

See it on a real ticker →