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Stock Market Basics 96: Position Size, Why “How Much to Buy” Matters More Than Finding the Perfect Stock 3-Line Summary Position size determines how much of your portfolio is allocated to a single stock or investment idea. Even a great stock can damage a portfolio if the position is too large and the investment thesis turns out to be wrong. Investors should consider conviction, risk-reward ratio, volatility, financial stability, diversification, and emotional tolerance when deciding position size. Recommended Keywords position size, portfolio management, risk management, risk reward ratio, expected value, diversification, concentrated investing, margin of safety, long term investing, stock market basics, investor psychology Table of Contents What Is Position Size? Why Position Sizing Matters More Than Stock Selection The Relationship Between Position Size and Risk-Reward Ratio The Relationship Between Position Size and Expected Value Position Size and Loss Tolerance Should High Convict...