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All-In on Stocks: Why Young Investors Must Guard Against the Risks

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  Published in Stocks and Investing on Tuesday, November 18th 2025 at 12:13 GMT by Toronto Star

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All‑In on Stocks: Why Young Investors Must Guard Against the Risks, According to Experts

A growing wave of Canadian millennials and Gen‑Zers are turning their entire savings into equity investments, riding the highs of a bullish market and chasing the “All‑In” narrative that has dominated headlines in the last two years. While a strong market may seem to promise quick gains, seasoned financial professionals caution that the same volatility that fuels excitement can also deliver devastating losses—particularly for those who lack a diversified strategy and a solid understanding of risk.

The “All‑In” Frenzy

The term “All‑In” has become shorthand for a strategy that concentrates wealth in a handful of high‑growth stocks, often in the technology, cannabis, or electric‑vehicle sectors. Recent surveys cited in the article show that 37 % of investors aged 18‑34 claim to have invested more than 70 % of their portfolio in just three or four equities, a stark contrast to the 12 % of older investors who hold a similar concentration. The impetus behind the trend is twofold: (1) social media platforms like TikTok and Reddit amplify hype around “meme stocks,” and (2) the low‑interest‑rate environment has pushed savers to seek higher returns in equities.

One illustrative case is that of 22‑year‑old Maya Singh, who, after a modest savings account balance of $7,500, liquidated her emergency fund and allocated 100 % of her money to a handful of growth stocks. Singh, who earned a modest income as a retail assistant, says she was “spurred on by stories of overnight riches” and the fear of missing out (FOMO). Her experience echoes a pattern reported by the Canadian Investment Management Association (CIMA) in a 2023 study: younger investors who “go all‑in” are 2.5 times more likely to experience significant portfolio drawdowns during market corrections.

The Risks, Explained

1. Concentration and Lack of Diversification
A portfolio heavily tilted toward a single sector or a handful of companies is highly susceptible to idiosyncratic shocks—company‑specific news, regulatory changes, or supply‑chain disruptions. The article quotes RBC Wealth Management’s Chief Investment Officer, Dr. Maya Patel, who warns that “concentrated exposure magnifies the risk of a sharp downturn in that specific sector, especially when the market is overvalued.”

2. Volatility and Emotional Decision‑Making
When stocks swing 10 % in a single week, a concentrated portfolio can see its value fall dramatically, eroding the investor’s confidence. The article cites research by the University of Toronto’s Rotman School of Management showing that “young investors are more likely to make hasty, emotionally driven sell‑offs during periods of volatility.” In a worst‑case scenario, a portfolio that has been “All‑In” during a rally can collapse by as much as 30 % during a correction, wiping out years of gains in a matter of months.

3. Insufficient Long‑Term Horizon
Although many young investors are planning for retirement in the next 20–30 years, their financial plans often include short‑term goals such as buying a home or starting a business. The article highlights that “the longer the investment horizon, the more time there is to recover from a downturn.” For those with upcoming financial commitments, a concentrated equity strategy can jeopardise those goals.

4. Leverage and Margin Risk
A subset of the “All‑In” crowd has also taken to buying on margin or using derivatives to amplify returns. Experts in the article underscore that “using leverage can turn a modest downturn into a margin call, forcing the investor to liquidate positions at a loss.” One anecdote mentions a 25‑year‑old who lost nearly $4,000 on a margin trade after a single stock fell by 15 %.

Expert Advice and Practical Strategies

Diversify, Diversify, Diversify
The most common recommendation across the article is to spread risk across asset classes. Dr. Patel proposes a 60/40 equity‑fixed‑income mix for most young investors, with 40 % of the equity portion invested in broad market ETFs that track the S&P 500 or Canadian equity indexes. This approach reduces exposure to any single company or sector while still allowing participation in market growth.

Use Dollar‑Cost Averaging (DCA)
The article stresses the benefits of DCA—investing a fixed amount regularly regardless of market conditions. By spreading purchases over time, investors avoid the temptation to time the market and lower the average cost per share. CIMA’s study found that DCA strategies reduced the impact of volatility by an average of 15 % over five years.

Build an Emergency Fund
A practical step is to keep at least three to six months’ worth of living expenses in a liquid, low‑risk account. This protects investors from forced liquidations during a market downturn. The article cites a Bank of Canada report that “investors who maintain an emergency cushion are less likely to panic sell during market volatility.”

Seek Professional Guidance
Financial advisors can help young investors develop a balanced plan that aligns with risk tolerance, time horizon, and financial goals. The article highlights the growing popularity of robo‑advisors like Wealthsimple and Questrade’s Q-Advisor, which automatically rebalance portfolios to maintain target asset allocations.

Looking Ahead

The article concludes by acknowledging that a bullish market can still be a powerful catalyst for wealth building if approached prudently. However, the key lesson for young Canadians is to resist the allure of “All‑In” enthusiasm and instead adopt a disciplined, diversified approach that balances growth potential with risk management. The piece urges readers to view equity investing as a long‑term endeavor and to stay informed through reputable sources—such as the Canadian Securities Administrators (CSA) and academic research—rather than chasing social‑media hype.

In a world where the next big stock can rise or fall in a day, the most enduring investment wisdom remains the same: diversify, invest for the long haul, and keep your emotional impulses in check. By doing so, young investors can protect themselves from the pitfalls that accompany an “All‑In” strategy and position their portfolios for sustained, healthy growth.