Concentrated portfolio too risky?

May 25, 2021 22 Comments

Have about 700k in stock including my vested Microsoft RSU’s.

It is divided into 5 stocks ranging from 200k to 60k.

No ETF’s, pretty much all tech except for one.
Anyone else trying this strategy?

comments

Want to comment? LOG IN or SIGN UP
TOP 22 Comments
  • Having a concentrated portfolio is easier to manage, if one company starts lagging growth I can easily just sell it and invest into other sectors or redistribute to existing growth stock.

    The only thing is, you have to get used to the scale and increased swings.

    Recently during the rotation out of tech stock, my shit fell 50k in a matter of weeks.

    It recovered back now but those swings might be unnerving for some people.
    May 26, 2021 3
    • Lol when did I say easier to manage means I’m immune to fraud? What r u even talking about?

      I assign very low risk of such events on the shit I am in $150k or $200k for.
      May 27, 2021
    • Google
      🐔🐔 ✅

      Go to company page Google

      🐔🐔 ✅
      I'm not talking about fraud on your account, I'm talking about fraud that tanks the stock. Imagine being 100% in Enron or Rite Aid when it was revealed they were lying about all of their numbers.
      May 27, 2021
  • Google
    Ovid

    Go to company page Google

    Ovid
    If a company stops doing well, it is hard to hold and you will incur taxes selling. This doesn’t happen with an ETF (QQQ). Also I assume you will carry this through your retirement life which could be 50 years from now. How many of these five tech stocks will be front runners till then?
    May 25, 2021 3
  • The thing that I never did the math on with previous RSUs from another large company was hold them as long as possible. I bought into the diversification myth, the idea that I shouldn't have 80% of my stock in one company. Well guess what, I had to pay cap gains tax to sell my RSUs then invest that money into other companies, which I would also have to pay capital gains tax on. If I just held the shares of my RSUs, I would have been way better off. If you think Microsoft has a solid 10+ years in front of it, why would you sell (purely on tax reasons alone)?
    May 25, 2021 2
    • Exactly, these big tech companies actually outperform s&p500 even during a downturn.

      Which is why I’m not holding any index ETF’s. Just buy 100-200k of Goog, Amzn, MSFT, AAPL each and forget about it.

      🤷🏻‍♂️
      May 25, 2021
    • Twitter
      XVRj45

      Go to company page Twitter

      XVRj45
      That’s basically almost like holding a tech etf like VGT for example. That’s an extremely high risk strategy. Will the growth last for another 10 years? Possibly. But 20-30 years its much harder to tell. You can check back 30-40 years to see the downturns in tech. Okay to do as long as you realize the risk. I would much rather do this with like 10% of your portfolio and leave the rest in VTI.
      May 25, 2021
  • Apple
    aWVt68

    Go to company page Apple

    aWVt68
    Once you have won the game move it all to index funds and never worry about individual stock moves. My plan is to get $3m in index funds and let it ride in the rest
    May 27, 2021 0
  • The only stock I own is Broadcom rsu. Rest is in ETF. My plan is to sell the rsu when I FIRE - to keep my tax low and invest proceeds in etf. One reason I like etfs is that the index takes care of poor performing companies by booting them off.
    May 26, 2021 0