New Delhi, June 16 -- When equity markets rally, portfolios with concentrated bets often look like winners.

Investors in stocks like Gensol Engineering or Mazagon Dock in 2023 may have flaunted triple-digit returns. But beneath that temporary high lies a quiet but dangerous threat: concentration risk.

Concentration risk refers to excessive exposure to a single stock, sector, or strategy. While it can magnify gains, it also amplifies losses when things go wrong.

In a country where stock investing is now mainstream and mutual funds manage over Rs.55 lakh crore (as of April 2025), this risk often goes unnoticed-until the tide turns.

Also read: Devina Mehra: Diversified or concentrated portfolio? It's an easy choice

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