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5 July, 10:07

Why an investor might choose to have less than 20% holding in a company if they could have more?

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  1. 5 July, 12:02
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    The simple answer here is you never want to over commit any part of your portfolio. Every single successful investor has a wide variety of investment holdings. This is known as diversification. If you place all of your "eggs in one basket," so to speak, if that investment were to play against you, your losses may be much higher than anticipated or often irrecoverable. With a diverse portfolio, when one small portion of your investment strategy fails, you can count on other, more successful aspect to make up the difference.
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