What is overweight in Portfolio Management?

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An overweight investment is a sector of assets or industries that contains a larger portfolio than usual or an index. An investor may choose to dedicate most of his portfolio to a sector that appears to be particularly promising, or the investor may gain excess weight on defense stocks and bonds at a time when prices are fluctuating.

Overweight and its opposite, underweight are also used by analysts and commentators in recommendations for acquiring or avoiding certain investments or sectors. For example, if federal defense spending is going to increase or decrease, the analyst may recommend that the investor gain excess weight or underdevelopment for defense-related businesses.
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