Concentration risk (Klumpenrisiko)
The risk that arises when a large part of your money sits in one stock, sector or region.
In short
As of 8 October 2026Concentration risk arises when a large part of your money sits in one stock, sector, region or with your employer. If exactly that part does badly, your whole portfolio suffers. Even broad ETFs can be concentrated, with just over 70 % US stocks in the MSCI World. The remedy is to spread your money widely across many companies and countries.
You have concentration risk (German: Klumpenrisiko) when a lot of money rides on a few bets: a single stock, one sector, one country or your own employer. If exactly that part does badly, your entire wealth suffers. The remedy is diversification.
Broad ETFs are not immune either. US companies make up just over 70 % of the MSCI World, and a handful of big tech firms account for a large share of the S&P 500. That is not a mistake, but you should know it before adding individual US tech stocks on top.
Example: you have invested 20,000 euros, 15,000 of it in shares of your employer. If the company hits a crisis, you might lose your job and your savings at the same time. How spreading risk works is explained in the chapter on risk and diversification.
As of 8 October 2026 · Educational content, not investment or tax advice.