In this paper, Dr. McCann and Dr. Luo explore the risk of holding concentrated investments and explain and evaluate risk management strategies.

Corporate and municipal bonds are substantially more expensive for retail investors to trade than similar-sized trades in common stocks. Trading costs including explicit commissions, mark-ups and mark-downs are significantly higher for retail-sized (small) bond trades than for institutional-sized (large) bond trades. Dr. Piwowar summarizes key findings in the academic finance literature on bond market trading costs, including research on the effects of adding price transparency to the bond markets, and explains how bond trading costs can be hidden in realistic examples using simple numerical examples.

Investments Through Time: The Evolution of Investment Products and How They are Sold.