The "One-stock portfolio"

Here’s a unique test for investors: If you had to sell down your portfolio and invest it all in just one stock, ask yourself which stock would it be? While we’re not supposed to have favourites, everyone does, and most people can nominate their one stock without pausing for thought.

Marcus Padley threw me a curveball by posing this unusual theoretical question during our video interview recently. To be clear, he’s not advocating that investors should hold just one stock, just thinking about which stock it would be. His point is that investors are invariably deeply informed about the stock that they select. 

Marcus then explained how answering this question also reveals a critical flaw present in most portfolios, before going on to offer a simple solution anyone could put in place with a small amount of work.  

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