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Why is Overconcentration Dangerous?

Why is Overconcentration Dangerous?

Diversification is the cornerstone of a profitable stock profile and the reason for this is simple: too much concentration in a specific area can result in significant losses when the market fluctuates. Why then would a stock broker encourage a client to concentrate on one specific market sector? The reasons can be as complex as stock market fraud itself.

Overconcentration is appropriate in some cases, particularly for risk-tolerant investors. But when an investor is not in this category, overconcentration is a very dangerous thing. When a stock broker encourages a client to over concentrate or makes those changes on his own, he may be liable for damages that result. The best way to learn if you have cause to file suit is by speaking with one of the experienced stock fraud attorneys at Colling Gilbert Wright.

With over eight decades of combined experience our stock fraud attorneys known how to identify overconcentration and other forms of stock broker negligence – and how to get our clients the compensation they deserve. We would be honored to meet with you free of charge to discuss your case and your options, and to help you choose the best course of action.

To schedule your free consultation, please contact Colling Gilbert Wright today.