You probably think you're diversified. You own an index fund, maybe a few of them, plus your company stock, plus a couple of names you believe in. Spread out, right? Pull up your actual holdings and look at the overlap. It’s probably not what you think.

I talk to people in tech all the time who are certain they've got this handled. Then I look at the portfolio: 60% in an S&P 500 ETF, 20% in their own employer's stock, and 20% in NVIDIA. They see three different positions. I see one giant bet on US tech, made three slightly different ways.

Here's the thing about that S&P 500 ETF everyone treats as the definition of "diversified." A huge chunk of it is concentrated in a handful of mega-cap tech names — Apple, Microsoft, NVIDIA, and a few others now make up an enormous share of the index. So when you add your own tech employer's stock on top, and then a tech favorite like NVIDIA on top of that, you're not layering in diversification. You're tripling down on the exact same sector. The names look different. The underlying bet is similar.

That's the trap I call concentration in a costume. Real diversification means owning things that don't all move together. If your "diversified" portfolio would drop 40% the day the tech sector pulls back, it was never diversified — it was concentrated the whole time. It just had enough tickers to look spread out.

And it goes a layer deeper than sector. Most US tech employees are also concentrated by country. The S&P 500 is entirely US. Your company is US. Your tech holdings are US. So your entire financial life is a bet on one sector, in one country. Meanwhile there's an entire world out there. To illustrate how different markets can perform in different years, in 2025 the S&P 500 returned approximately 18%, while the MSCI EAFE Index returned 31% and MSCI Emerging Markets Index returned approximately 33.6%. (Performance varies from year to year, and this example is provided for illustrative purposes only.)

The people who only owned US tech weren't wrong to do well — but they were exposed to a single outcome in a way they didn't realize, and they left a more balanced result on the table.

The reason this matters isn't academic. It connects directly to the concentration risk in your equity comp. You already work at a tech company. Your salary, your benefits, your RSUs — all tied to tech. If your investment portfolio is also all tech, then a sector-wide downturn hits your job security, your unvested equity, and your savings simultaneously. Everything you own moves in the same direction at the same time. That's the opposite of what a portfolio is supposed to do for you.

There's a humbling history lesson here too. Look back thirty years. Of the ten largest US companies in 1995, only one — Microsoft — is still in the top ten today. In 1995, everyone was certain GE and IBM were untouchable, permanent fixtures. Today people feel the same certainty about a handful of current tech giants. They might be right. They might keep dominating for decades. But the entire point is that you cannot know, and the people who bet their whole portfolio on the obvious winners of any given era have a long history of being surprised. That uncertainty is precisely the argument for genuine, global diversification — not because tech will fail, but because you can't be sure which names won't.

So what does real diversification look like? Broadly, it means deliberately owning assets that respond differently to the same events — across sectors, across geographies, across asset classes — so that no single shock takes down everything you own at once. It also means looking through your funds at what they actually hold, not just counting how many tickers are on the screen. Twelve funds that all hold the same five names is one bet, not twelve.

The fix isn't complicated, but it does require actually checking. Most people have never looked at the overlap between their funds, their company stock, and their individual picks. When they finally do, the concentration is almost always worse than they assumed.

If you want a clear-eyed look at how concentrated you really are — beneath the surface of "I own index funds, I'm fine" — book a complimentary consultation. The map of where your risk actually lives is invaluable.