Someone wrote in to Reuters' Ask Lauren column this week with a question I've heard a thousand times: why is it bad to invest in a single stock? The short answer is that it isn't automatically bad. It's just that most people who do it aren't investing. They're making a concentrated bet and calling it a plan.

Let me use some plain math. Say you put $50,000 into one company. If that company blows up, loses its biggest customer, gets hit with an accounting scandal, or simply stops growing, you don't lose 10% or 20%. You can lose 60%, 80%, or the whole thing. Enron's collapse in 2001 is the example everyone remembers, and reports at the time documented how many of its employees held heavy concentrations of company stock in their retirement plans. Plenty of those people were smart, hardworking folks. The stock didn't care.

Now spread that same $50,000 across a total market index fund holding thousands of companies. One of them can go to zero and your portfolio barely registers it. That's the whole point of diversification: protecting yourself from your worst outcome, even if it means giving up some of your best one.

Then there's the part people miss. The upside of concentration is smaller than it looks, because the company that seems obvious rarely is. Every era has its can't-miss names, the ones that seem like sure things right up until they aren't. In my four decades of watching this, the confident single-stock pickers of one decade are usually quiet by the next. The research backs up the caution here: finance professor Hendrik Bessembinder's well-known study, "Do Stocks Outperform Treasury Bills?", found that a small fraction of stocks accounts for the bulk of the market's long-run gains while most individual stocks underperform Treasury bills over their lifetimes. The catch is that you don't know in advance which ones will be the winners. Owning the whole basket means you automatically own them.

There's a reasonable exception, and I'll acknowledge it. Company stock in a 401(k) match, or a small "play money" sleeve of maybe 5% of your portfolio, won't sink you. The trouble starts when a position grows to 30%, 50%, 90% of what you own, usually through inertia or loyalty rather than any decision you actually made. If that's you, this is your nudge to at least look at the number.

A question worth asking yourself: if your single stock dropped by half tomorrow, would it change your retirement date? If the answer is yes, you're carrying more risk than you think you are.

A broad index fund, bought consistently over years, is boring. It has also quietly outworked most of the confident bets I've watched come and go. Patience and consistency still beat the big swing.

As always, I'm sharing perspective, not professional financial advice. Talk to a fiduciary advisor about your own situation.