I’m in my early 30s and have about 200k invested in stocks. Since I still have age on my side, I want to be a bit aggressive with my portfolio. I firmly believe Big Tech companies will keep outperforming over the next 10 years at least. Also, since I’m from Tech myself, I am more familiar with these companies compared to other sectors. About rest 10% is in ETFs (VOO, SCHD, SPDR) and remaining 10% in non tech (Banks, Costco, Home Depot, Disney etc).
Most of my tech portfolio is in the following companies: Apple, Microsoft, Google, Amazon, Meta, Nvidia, Salesforce, Adobe, PayPal.
Is it too risky?
Edit: If you feel it is risky, please suggest good non-tech stocks or ETFs I should consider in the long term.
TC: 200k, currently single
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comments
VTI and VOO are both mostly tech stocks too, so you shouldn’t consider those hedges against tech.
However, this is not the greatest strategy because, as your portfolio grows, you expose yourself to increasing levels of risk as time goes on. Ideally, you want to reduce risk as time goes on.
I would recommend to have a target amount that you want to allocate towards tech and then, as you start reaching this target, you should start allocating funds in excess of this amount to other investments.
I would also recommend, if you haven't already, beginning to implement hedging positions using options to reduce the risk that you lose a massive amount of your investment if the tech sector slumps (as it has recently). With such a large percentage of your portfolio in a single sector, you can lose a lot of money very fast, and once you approach a mid 6 figure portfolio, you should be able to easily afford some insurance by buying the appropriate puts.
I have one account where I am 70% in tech long, and it is down about 40% ytd right now. I have another account where I am in mostly the same positions but I am taking profits as they come and this account is only down about 15% ytd right now. I expect the first account to recover fully over time, but I am running this experiment to test these two strategies over a decade (they are about 2.5 years in). For comparison, my main account is balanced across several sectors (only has about 20% weight in tech) and, with all long positions and hedging, I am up ytd about 6%.
I expect the tech-weighted accounts to out perform my main account over time, but, as you can see, they can take quite large losses when the market turns against you, so you need to have the risk appetite for that if you want to adopt such a strategy.
If you want the Vanguard ETF that is overweight tech, you want to look at VGT. Always read the prospectus of any fund you are considering to fully understand how it is managed and any associated fees.