How to Find Out What Percentage of Your Portfolio Each Stock Makes Up?
You probably have heard this advice: diversify your stock portfolio. But to do that effectively, you need to know how much of your portfolio each stock you own makes up. You can calculate this percentage over time, based on the changing value of the shares you own.
To find what percentage of your portfolio a specific stock makes up, find the total portfolio value and divide that figure by the total value of the specific stock.
Calculating Your Total Portfolio Value
You generally want to compute what percentage each stock makes up of your portfolio by value – not by the number of shares – to find out how much money you've allocated to each particular investment. To do this, you'll first need to know how much your total stock portfolio is worth so you can look at each stock as a percentage of that value. You might be able to see this total value information directly on your stock brokerage's website, but if not, it's easy to figure out.
Take each stock that you own and look up how many shares you own. Then, look up how much the stock is currently worth at your brokerage's site or another stock quote service. For each stock, multiply the number of shares you own by the current price. That will give you the value of the shares in that stock you own.
Then, add these numbers together for all of your stocks. If you own stocks through multiple accounts, potentially at multiple brokerages, remember to look through each account. This sum is the total value of all the stock that you won.
Weighting Individual Stocks
Now, to find out what fraction of your portfolio any particular stock makes up, take the number of shares times the stock price for that stock in particular, and divide it by the total value of all of your stock. Multiply by 100 to get a percentage value.
That's the total percentage of your stock portfolio represented by that stock. Depending on what you're trying to calculate, you might also want to add up the percentages for different types of companies' stock to figure out, for example, what percentage of your portfolio is dedicated to technology stock and what percentage to utility stocks.
Computing Other Types of Investments
If you are interested in computing how your portfolio is allocated beyond stocks, such as if you own bonds, certificates of deposit or shares in mutual funds, you can use the same principle. Sum up the value of all the assets and divide the amount of money in each particular asset by the total.
You can use this method to see how close you are to meeting your investment allocation targets. Many people adjust their allocations at different points in their lives to get a certain amount of investment return or to adjust their level of risk. Some brokerages might automatically provide these numbers, so it can be worth searching your brokerage's website before breaking out your calculator.
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.