Concentration risk is easy to underestimate when a handful of familiar companies dominate headlines and index performance. Buying several funds does not guarantee diversification if they hold similar large companies. The useful exercise is to look through the fund labels and identify what economic bets overlap.
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Diversification is not a guarantee against loss, and a broad basket can still fall when the entire market reprices risk. But concentration creates an additional problem: a company-specific shock can matter far more than the investor expected. The difficult part is recognising overlap before a dramatic market move exposes it.
Should diversification be measured by ticker count, underlying businesses, sectors, countries, sources of revenue or something else? The question is educational; please avoid personalised buy/sell advice or stock promotion.