Philosophical question: When is a stock too much of your portfolio?I bought NVDA in 2018, and am grateful for the opportunity to have done so. But now I have a question…The stock has become half the value of my retirement fund. When is it wise to sell some of it so I don’t have too many eggs in one basket? Obviously this may be a mute point if NVDA releases disappointing results today.
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I would guess that in any objective, long-term study the answer would be that letting your winners run is the best answer, on average. Water the flowers, pull the weeds.
But we’re not studies, we’re human beings, so we need to establish whatever guardrails let us sleep at night. For me, I start getting itchy when a company makes up more than 20% of my portfolio… with some exceptions. That keeps me from transformational wealth and 100,000% returns, but also lets me sleep without worrying that one company will turn out to be Enron.
Thank you Travis. You always have good advice and I appreciate all your inputs/articles.