How to decide how much of your portfolio goes into a single share, with simple sizing rules, worked examples and the liquidity limits of UZSE stocks.
In short
Position sizing decides how much of your portfolio goes into one share, and it matters as much as choosing the share.
The more one holding weighs, the more a single piece of bad news costs the whole portfolio.
Simple rules: a cap per position, equal weights, or a size based on the loss you can accept.
On UZSE, compare the position with a normal day's turnover, and build it over several days with limit orders.
Shares that depend on the same driver behave like one large position, so group them when you add up.
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What asset allocation is, how goals, time horizon and risk capacity shape your mix of cash, fixed income and shares, and what it means on the Uzbek market.
What volatility and maximum drawdown mean, how to read them, why losses need bigger gains to recover, and why thin UZSE trading can make risk look smaller.
Choosing a good company is only half of a decision. The other half is how much money to put into it. Two investors can buy the same share and end up in very different places because one put 5% of their savings into it and the other put 60%. This is called position sizing. This guide explains why it matters, gives three simple ways to decide a size, and shows what the limited liquidity of many Tashkent Stock Exchange (UZSE) shares adds to the picture.
What a position is
A position is everything you hold in one security: all your shares of one company, or all your bonds of one issue. Its size is usually measured as a share of your whole investment portfolio. If your portfolio is worth 20,000,000 soʻm and one share accounts for 4,000,000 soʻm of it, that position is 20% of the portfolio.
Position sizing asks a plain question before you buy: if this one investment goes badly wrong, how much of my total money am I prepared to lose?
Why size matters more than you expect
Even careful research can be wrong. A company can lose a key customer, a regulator can change the rules, or a bank can suffer bad loans nobody saw coming. The size of the position decides whether such an event is a setback or a disaster.
An illustrative example. You hold equal amounts in a number of shares, and one of them falls by half while the others do not move:
With 1 share, the whole portfolio loses 50%.
With 2 shares, each is 50% of the portfolio, and the portfolio loses 25%.
With 5 shares, each is 20%, and the portfolio loses 10%.
With 10 shares, each is 10%, and the portfolio loses 5%.
With 20 shares, each is 5%, and the portfolio loses 2.5%.
One share halves: the loss depends on how many you hold
Portfolio loss, %
The same bad news costs ten times more in a two-share portfolio than in a twenty-share one. The arithmetic of recovery makes it worse: a 25% loss needs a 33% gain just to get back to where you started, while a 2.5% loss needs about 2.6%.
Three simple ways to set a size
1. A fixed maximum per position
The simplest rule is a cap, for example no single share above 10% of the portfolio when you buy it. A cap does not tell you what to buy, but it stops enthusiasm from turning one idea into most of your wealth. Some investors use a lower cap for riskier holdings and a higher one for a government bond, whose credit risk is that of the state.
2. Equal weights
Divide the money for shares equally between the companies you have chosen. With 12,000,000 soʻm and six companies, each gets 2,000,000 soʻm. Equal weights are easy to understand and avoid the trap of putting the most money into the idea you are most excited about, which is not always the best one.
3. Size by how much you could lose
A more deliberate method starts from the loss you can accept. Suppose you decide that one position going badly wrong should not cost more than 3% of your portfolio. If you judge that a particular share could realistically fall 40% in a bad case, the position can be up to 3% ÷ 40% = 7.5% of the portfolio. For a portfolio of 20,000,000 soʻm, that is 1,500,000 soʻm. A steadier share where you think a 20% fall is a realistic bad case could take up to 15%, subject to your overall cap.
The inputs are judgements, not facts, so the result is a guide rather than a precise answer. Its value is that it forces you to think about the downside before you buy.
Three ways to set a size
A fixed maximum
A cap on any single share when you buy it
Stops enthusiasm from turning one idea into most of your wealth
Equal weights
Divide the money for shares equally between the companies you have chosen
Avoids putting the most money into the idea you are most excited about
Size by possible loss
Start from the loss one position may cost the whole portfolio
Divide it by how far the share could realistically fall
The result is a guide, not a precise answer
The UZSE factor: liquidity
On a large exchange you can usually sell any normal position within minutes. On UZSE, many shares trade only a few times a day or not at all on some days. That changes position sizing in two ways.
Size relative to trading volume. Look at how many shares change hands on a typical day and at what value. If your planned position is several times a normal day's turnover, you may not be able to sell it quickly without pushing the price down. Some investors keep a position in a thinly traded share small enough to sell over a few sessions. Liquidity risk and thinly traded stocks shows how to check turnover.
Building the position. Buying a large amount at once in a thin market can move the price against you. Spreading purchases over several days with limit orders keeps you from paying far above the last trade. The order book, available with a free Finmind account, shows the best bids and offers during the session.
Sector overlap. Several UZSE shares can depend on the same driver, for example banking regulation or state-set tariffs. Two positions in the same sector can behave like one large position. When you add up your exposure, group holdings by what really drives them.
Value of shares traded per UZSE session
Value traded, UZS
Value traded
Median session
Keeping positions in check over time
A position that was 8% when you bought it can grow to 20% after a strong rise. That is good news, but it also means more of your wealth now rides on one company. Decide in advance what you will do when a position grows past your cap: trim it back, or at least stop adding to it and direct new money elsewhere. The portfolio rebalancing routine covers this.
A position that falls is harder. Adding to a loser to lower your average price can make sense if the reason you bought is intact, but it also increases your exposure to a company that is already hurting you. Your cap applies to additions as well.
A short checklist before you buy
What share of my portfolio will this position be at purchase?
Is it within my cap per position?
How much could it realistically fall, and what would that cost the whole portfolio?
How many days of normal trading would it take to sell?
Do I already hold something driven by the same factors?
What will I do if it doubles, and what if it halves?
Frequently asked questions
There is no exact number. The example in this article shows that the damage from one bad share shrinks quickly as the number of holdings grows from two to ten and more slowly after that. On UZSE, the number of liquid shares and your budget also set limits, so many investors combine a smaller number of shares with bonds and deposits.
It is a risk you should take knowingly. Knowing a company well reduces some risks but cannot remove events you cannot foresee, such as a regulatory change or a fraud. A cap per position protects you from being wrong about the company you are most sure of.
Many investors treat them differently. A bond of the Republic of Uzbekistan carries the credit risk of the state, which is different from the risk of one company, so some allow a larger position in it. It still carries interest rate and inflation risk, and it still ties up money until maturity or a sale.
You can trim it back to the cap, or stop adding to it and direct new money to other holdings until its weight falls. Selling exchange-traded shares is not taxed as income for individuals under Article 378, item 7 of the Tax Code as of September 2026, but commissions and liquidity still matter.
This article is for education only and is not investment advice. Investing in securities involves risk, including the loss of money you invest.
Key terms in this post
Liquidity
How easily you can buy or sell something quickly at a fair price. Where trades are few, liquidity is low.
Limit order
An order to buy or sell only at the price you set or better. It may wait, or never be filled.
Illustration: equal amounts in each company, one of them falls by 50% and the others do not move.
Show the figures
Equal holdings
Portfolio loss
1
50.0%
2
25.0%
5
10.0%
10
5.0%
20
2.5%
Session
Value of shares traded per session, Jul 2026 to Sep 2026. Source: UZSE trade results published on openinfo.uz. Price times volume of every share traded in the session, from the trade results Finmind stores. Read by Finmind on Sep 28, 2026.
