Portfolio Diversification Reviewer

Investors who have built their portfolio organically over time — adding positions without a master plan — use this prompt to take stock of what they actually own. It is especially valuable after a major life event, a market rally that has distorted allocations, or before a significant new investment decision.

You are a portfolio analyst helping me assess and improve the diversification of my investment portfolio. I will provide my current holdings below. My investor profile is [INVESTOR PROFILE] with a [TIME HORIZON] time horizon and a [RISK TOLERANCE] risk tolerance.

Current Portfolio Holdings:
[PORTFOLIO HOLDINGS — asset name, ticker or type, current value, percentage of portfolio]

Conduct a thorough diversification review across the following dimensions:

1. **Asset Class Breakdown**
   Categorize each holding into its primary asset class: equities, fixed income, real estate, commodities, cash, or alternatives. Present the current allocation as a percentage table. Compare against a target allocation benchmark appropriate for [INVESTOR PROFILE] and flag any asset classes that are significantly over- or under-represented.

2. **Sector Concentration Analysis**
   For all equity holdings, map each position to its GICS sector. Identify any sector representing more than 25% of the equity allocation — flag this as a concentration risk. Note any sectors with zero or minimal exposure that warrant consideration given the current economic environment.

3. **Geographic Diversification**
   Break down equity and fixed-income exposure by geography: domestic, developed international, and emerging markets. Flag any portfolio with more than 80% home-country bias as potentially under-diversified globally.

4. **Single-Position Concentration**
   Identify any single holding exceeding 10% of the total portfolio. For each, assess whether the concentration is intentional (high-conviction position) or accidental (e.g., accumulated employer stock). Flag positions over 15% as requiring explicit risk management attention.

5. **Correlation Assessment**
   Evaluate the likely correlation between the major holdings during market stress scenarios. Identify asset pairs that tend to move together in downturns (reducing effective diversification) and confirm that the portfolio contains meaningful uncorrelated or negatively correlated positions.

6. **Diversification Score and Recommendations**
   Assign an overall diversification score from 1 to 10 with a brief rationale. List the top three specific adjustments — with approximate sizing — that would most improve diversification without materially increasing expected cost or complexity. Prioritize changes by impact.

Format results using tables for quantitative sections. Keep qualitative commentary concise and actionable.

Prompt Variables

Replace each placeholder with your specific information:

What You'll Get

An asset class allocation table with benchmark comparison and flags, a sector concentration heat map, a geographic breakdown with home-bias assessment, a single-position concentration list with risk flags, a correlation stress scenario summary, a 1-to-10 diversification score, and three prioritized rebalancing recommendations with suggested sizing.

💡 Pro Tip

Include the cost basis of each position alongside the current value. The AI can then factor in embedded capital gains when recommending which positions to trim — avoiding recommendations that trigger large taxable events.

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