There are many great companies on the market making great products. As more and more companies adopt AI. it is going to help these companies make their products better and make more new products. To me that presents many different quality stock opportunities.
Recently I heard a quote:
Concentration builds wealth
Diversification protects wealth
I believe this to a degree. A great ETF like $VOO has historically grown over long periods and diversify your wealth. But your money could grow faster if you invest those same dollars into growth stocks.
Recently, I took a hard look at my portfolio. Over time I consistently added great companies to my portfolio: $SOFI, $HOOD and so many more. But I eventually realized that I had added too many stocks to my portfolio. It was basically an index fund.
There is nothing wrong with an index fund, but I knew that my portfolio was not growing as quickly as it could if I concentrated. Also, the AI landscape has drastically changed the market. Software companies were now being punished. One of my favorites: $GDDY was hit hard. Others were also hit $CRM, $ADBE, $INTU. The catalyst pushing the market way up was hitting stocks I loved hard.
I knew that I need to make changes, but I did not realize how hard it would actually be. I hate selling stocks. I think of myself as a forever investor. I want to be Warren Buffett owning Coca Cola and American Express for 35 years. But I still had too many stocks. Even if one stock went way up in value, it was not going to make a difference to my overall portfolio.
Also, the market was changing. AI was taking over and I did not own many semiconductor related stocks. AI has already changed the stock market landscape, I did not want to miss out on the next 10 years of growth.
Which stocks do I cut?
I had over 60 stocks in the portfolio. That included large companies I still admired, such as $V and $JPM.
But if you want the possibility of outperforming, you may need a more concentrated portfolio.
Try to find the best.
You need to concentrate on companies growing their revenue at a faster rate than the average. Stocks like $V and $WMT are consistent growers. Stocks like $GOOG and $MSFT have grown revenue at a higher level than average for years and they have been reward with a higher market cap.
It takes a lot of research. One of my favorite sites is: https://stockanalysis.com
Once you find the list of companies that are growing quickly you have to choose which ones you think are going to win for the next 20 years. In the end I chose 14 stocks. In different sectors. Online advertising, energy, chips etc.
Some pay dividends, but I selected them primarily for growth.
One of my largest positions is $AMZN. And recently I was rewarded. They have a growing retail business, cloud and advertising. There are multiple ways to win.
But not all have gone up. Great things take time. I now think about my portfolio the way I think about a career. Specialization can produce better results, but only when you choose carefully, keep learning and remain committed for the long term.
Concentration does not guarantee better returns. It creates more upside when I am right, but it also creates more risk when I am wrong. That is why reducing my portfolio to 14 stocks does not mean the work is finished. It means I need to understand these companies better, follow their results and remain willing to change my mind when the facts change.
My goal is not to own every great company. It is to own the small group of companies that I believe have the strongest opportunities for long-term growth. I will inevitably miss some winners—and some of my choices will disappoint me. That is part of investing.
For now, I feel more confident owning 14 companies intentionally than owning more than 60 simply because I could not bring myself to sell them. My portfolio is no longer trying to imitate an index. Every position needs a reason to be there, and every winner can make a meaningful difference.
I am not finished crafting this portfolio. I may add or remove a few stocks that I am on the fence about. I will break down all the positions in a future post.
Right now my core stocks include: $AMZN, $HOOD, $AXON, $AMD
Concentration may build wealth, but only when it is supported by patience, research and conviction. Now comes the hardest part: giving these companies enough time to prove me right—or enough evidence to show me that I was wrong.
How many stocks do you believe belong in a concentrated portfolio?
This post reflects my personal investment decisions and is not financial advice.
About the Author
Collin Harness is the founder of Harness Money, where he shares practical strategies for building wealth, creating passive income, and achieving financial freedom. Drawing on years of hands-on investing, long-term portfolio management, and a career leading complex technology projects, he focuses on turning complicated financial topics into simple, actionable steps. Through Harness Money, Collin openly documents his own investing journey and shares the lessons, successes, and mistakes that help readers make smarter money decisions. Learn more about Collin • Subscribe to the newsletter • Read more investing articles