You own a large share portfolio. Currently 40% of this portfolio is invested in two small IT companies where you own, in each case, about 20% of each company. The rest (60%) of your share portfolio is invested in six large mining companies quoted on both the London and New York stock exchanges. Your share holdings in these six companies are a very small proportion of their total market capitalisations.

(a) Explain the risks arising from your portfolio composition.

(b) Comment on how you might want to change the composition of your portfolio in the light of your explanation in (b).