Position Sizing by Conviction Calculator
Size a stock position based on how strongly you believe in it, turning a conviction level into a target dollar amount and share count.
How it works
Target position = portfolio value × conviction weight · Shares = floor(target ÷ share price)
Conviction-based sizing scales each position to how much confidence you have in it rather than betting equally on every idea. A simple, disciplined ladder — say 3% for a low-conviction position, 6% for medium and 10% for high — keeps any single stock from dominating the portfolio while still letting your best ideas carry more weight. Fixing the weights in advance also removes emotion from the moment of buying.
Worked example
On a $100,000 portfolio, a medium-conviction idea gets 6%, or $6,000. At a $150 share price that is floor(6,000 ÷ 150) = 40 shares, investing $6,000.
Frequently asked questions
Why size positions by conviction?
Equal-weighting treats a throwaway idea the same as your best one. Conviction sizing lets stronger ideas contribute more return while a fixed ceiling on each keeps risk controlled.
What weights should I use?
The 3/6/10 ladder here is a common starting point, but choose bands that fit your risk tolerance and how many positions you hold. Many investors cap any single stock at 5% to 10%.
Does this manage risk on its own?
It controls concentration, not downside. Pair it with diversification and, if you use them, stop-losses or a maximum-loss-per-trade rule to manage the risk of any one position.
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Educational estimate, not investment advice. Past returns do not predict future results.