You do not want to have any single stock be more than 10% of your portfolio. A good rule of thumb.After seeing all the chatter about NVDA, I decided to check our investments. We bought this stock years ago for about $700. I was pretty shocked to see that it is now worth almost $300K! It is now a significant potion of our net worth. I feel like the smart thing to do is sell some of it, but I'm not sure how much. Any suggestions?
My husbanda jokingly said, "Welll need need to be sure to get our principal out". Hahahah!
I'm also curious to hear how you would reinvest the earnings. I feel like the stock gains in general over the past few years have put us out of balance with the more stable investments (Bonds, CDs, ...). Are there bond funds or something like that that would be a good place to put the earnings?
Invenstment accounts, and some in cash - $2.3 million
Home equity - $650K
We have $115K left on our mortgage. We are also considering just paying the house off. The interest rate is 7%.
Remember NVIDIA is also 7% of US equity index funds. So you are doubling up if you hold Vanguard Total Stock market or S&P 500 index.
I would definitely take enough off the table to pay off the mortgage. At current mortgage rates, that's a guaranteed 5-6% pa after tax return.
More generally I would suggest taking at least half off the table. But the 10% rule is a pretty good rule of thumb. So if you add 7% of your US Equity Index holdings + whatever is left of the NVIDIA holding, you probably get to more than that.
Statistics: Posted by Valuethinker — Thu Jun 27, 2024 3:04 am