The investopedia page on open position states that:
The recommendation for investors is to limit risk by only holding open positions that equate to 2% or less of their total portfolio value
I am new to financial markets and trying to learn how they work; what I don't understand about this statement is: if investors should only hold open positions of 2% of total portfolio value, and an open position includes a long position (i.e. holding stock) then where is the rest of the 98% of the value held?!
I realise I must be missing something so blatantly obvious/ intrinsic it's proving hard for me to google this question, hence the q. here.