Your portfolio might not be as diversified as you think. Diversification is an important tool for reducing the effects of long-term volatility while maintaining long-term goals, but your portfolio can be unintentionally concentrated.

One of the primary ways this happens occurs when you own an individual stock that’s also a large component of a mutual or exchange-traded fund. Apple, for example, has been a main driver of the S&P 500’s performance going back a number of years. Today it makes up about 7% of the S&P’s weighting. Microsoft isn’t far behind at around 6%, followed by the combined share classes of Alphabet (aka Google) and Amazon, both in the range of 4%.

Just by owning these four companies you could have a fifth of the S&P. So if you own an index fund tracking the S&P or another fund with these stocks, you’d own more of these stocks than you might think.

Mutual funds are another common source of duplication. Checking on common holdings here is more difficult because by the time you see a fund’s composition, several months have already passed. Fund managers might have increased or decreased their position in the stock since then. In any case, your fund adviser or brokerage might have a tool that helps you check for duplication in your funds; if not, you can at least check the top holdings on most financial news sites.

Remember to check across all your portfolios, including your spouse’s holdings. If you participate in an employer-sponsored retirement plan and have an IRA along with a taxable investment account, you’ll want to look at the combined holdings.

Discuss with your financial adviser an appropriate level of exposure to an individual stock. Opinions vary, but limiting the weight of any individual holding in your overall portfolio to 5% or 10% might be a good target.

Finally, don’t look only at the individual holdings. For example, if you own two large cap funds, does owning both provide additional diversification? For stocks, aim for a range of holdings in terms of company size (either by revenue or market capitalization) and industries. Bond investments also need to be diversified by credit quality and the types of issuers (government and corporate).

If you have unintended overlap or are overly concentrated in a holding, you can reduce or sell the holding and invest in an area where you don’t have as much exposure. Make sure you understand the tax consequences of selling and whether it makes more sense to make changes in a tax-deferred account rather than a taxable one.

Also, sometimes a holding becomes overweight in a portfolio because it has been particularly successful. A rapid run-up in a stock price, for example, can quickly move its weight in the portfolio from 10% to 20%. There’s often no need to slash your position in this investment right away so that you’re meeting diversification targets.

In these cases, consider allowing the holding to remain outside your target percentage while trimming the holding. Sometimes it’s better to let your winners keep running.

Evan R. Guido is the founder of Aksala Wealth Advisors LLC, a 2018 Forbes Next-Gen Advisors List Member, and Financial Professional at Avantax Investment ServicesSM. Evan heads a team of retirement transition strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 or eguido@aksalawealth.com. Read more of his insights at heraldtribune.com/business. Securities offered through Avantax Investment ServicesSM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory ServicesSM, insurance services offered through an Avantax affiliated insurance agency. 8225 Natures Way, Suite 119, Lakewood Ranch, FL 34202.

This article originally appeared on Sarasota Herald-Tribune: EVAN GUIDO: Your investments might not be as diversified as you think