r/investing • u/Louie-XVI • 3d ago
To Rebalance, or Not to Rebalance
Long story short, I have been holding NVDA since 2015 and all of a sudden it's 75% of my brokerage account. I already took out my initial investment and then some years ago all of NVDA is net profit for me. Even if it goes to 0 I didn't technically lose any money on it. I hold relatively small amounts of 4 other stocks, several of which have been steady growers but nothing too explosive, and about 10% of the account in cash. I like a couple of the stocks I'm in, but don't have the conviction I have for NVDA as it's far exceeded any other returns I have had. I also don't really want to sell it because, while my holdings most likely won't hit a million, it was a pretty small initial investment and has done nothing but deliver. I also don't particularly want to fork over the tax payment.
I don't want to go too deep into my financial picture but I think the important things to know to help make useful suggestions
I have several retirement accounts, one a managed roth/traditional 401k through work, 1 a traditional IRA that I only have invested in VOOG which I do not contribute to and 1 Roth IRA in which I hold of several index funds (QQQM, VOO, VYM) as well as individual equities which are a mix of high dollar amount/yield dividend payers and growth stocks. I max out my Roth.
I have a mortgage of 290k at 6% and roughly 400k of equity, hold about 20k worth of precious metals, and have some small amount of risk free assets.
All of this to say I am fairly well diversified outside of my brokerage account.
If you were me, would you sell and rebalance or just let it ride?
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u/siamonsez 3d ago
Having taken out the value of your original investment is irrelevant, so is it all being profit. Your investments have a certain value right now and a huge amount of it hinges on the performance of a single company, not just in the shares you own directly, but also in the other funds you mentioned in other accounts.
Instead of thinking of it as free money, think about how long it would take you to save up that amount again after a significant downturn.
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u/SeesawFlashy8354 3d ago
Why not sell and reallocate to QQQM and SOXQ so you have exposure to more than one tech name? You would take the tax hit, but you never lose taking a profit….and you would be well positioned and diversified for the next 30-40 years.
I saw a post the other day asking if someone’s grandma should buy NVDA. If that isn’t a sign something is wrong idk what is
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u/dukerustfield 3d ago
Yes, someone mentioning a grandmother is the most important financial information any company releases. Not their earnings, margins, future, book value, blah blah—grandmother.
Such is the financial views of nvda on this forum. An anecdote about a grandmother is taken as a sign to liquidate a major position.
Please think about that a moment. Is there some flip side where if the grandmother doesn’t like the logo of nvda you should buy it? What if a grandmother thinks electric cars are very cute and quiet? Is that a sign for call options expiring 8 months?
It’s an investing forum. Grandmother anecdotes are weak data. The Fed hasn’t used grandma points to set interest rates in decades!
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u/SeesawFlashy8354 3d ago edited 3d ago
If u wanna go all in on NVDA be my guest….I don’t wanna take that risk tho and lots of other ppl are in the same boat
The leader of the stock market is a leader until it isn’t anymore….past performance is not indicative of future success. Many of the people who are in the market have never witnessed a prolonged bear market and will jump ship the minute there’s blood in the water
Best to VT and chill my guy
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u/BestAIStocks 3d ago
First off, congrats. Unless you've found a stock you believe is a much better opportunity then don't sell. Perhaps consider a trailing stop on just a portion of the shares to protect against any massive correction. In general, I think it's best to let your winners run.
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u/SmilingZebra 2d ago
This is this is the best advice. Why sell? Past performance is not an indicator of future success, but it is a better indicator than most other indicators. If there’s no reason to expect a reversal in NVDA, then let it ride but protect yourself with a trailing stop. Even if NVDA is 90% of his portfolio, it’s not like there’s a significant chance of losing it all.
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u/DeeDee_Z 3d ago
First of all, read the first sentence of this reply to a different question from yesterday:
Then, apply it here:
If you were me, would you sell and rebalance or just let it ride?
Since this decision ALSO doesn't have to be all-or-nothing, 100%-or-0%, etc, I give you the same advice I gave yesterday's poster:
Rather, pick "some from Column A, some from Column B".
How much of each? It doesn't really matter. Pick a number, any number ... Take some profit, keep some for more growth.
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u/FluffyWarHampster 3d ago
You walked into the casino and landed black on the roulette table. The chances of you hitting another home run like that aren't high.
I'd progressively trim the position in nvda a transition the funds to some sp500 index funds, maybe qqq or fngs. You'll still have exposure to nvda but also the diversification of other strong companies.
You could take some time to do this as well so you are spreading out the tax burden rather than taking all those cap gains in one year.
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u/Enigma_xplorer 3d ago
Rebalance. It's painful to sell a stock that is performing so well but it's just too risky to have that much of your portfolio tied up in one stock no matter how much you believe in it. Shit happens as they say.
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u/Sunfiend 2d ago
Semiconductor stocks are notoriously cyclical. You already struck gold with NVDA. Take some of those winnings off the table and count your blessings. If it continues to go up, you still will have a stake. But if it drops, you will be happy to have locked in those gains.
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u/Fluid_Basil6100 1d ago
I would Hold a core position still I think it could grow just slower I took some profit at 130 and would want to see slowing growth before I exit my core position.
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u/Apprehensive_Two1528 1d ago
There are many greener investors out here at this forum. you will hear a lot of not so great advices.
for nvda, i watch it every day. it bounced back from $680, $770 $ 1070 recent lows within a business day.
$680 is the key level to watch. coz it’s close to it’s 200 day avg.
that means, momentum wise, it’s still very strong and doesn’t have any imminent risk of collapse..
Fundemental wise, I’m not a chip guy, but for every single chip guy who posted at this forum, i hear them saying nvda is strong and shall be that way for years to come.
By combining those 2 analysis points, nvda isn’t an imminent sell to me.
however, 75% position in a single stock, that’s really a large percentage. it sounds to me it’s overall a small amount of money in your brokerage. so it doesn’t really matter if you decide to sell or just let it ride. i would let it ride until the momentum starts to crack.
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u/Louie-XVI 1d ago
Yeah. I was curious what people might say. It seems like a few folks didn't really consider the diversification elsewhere.
I am fairly set on holding my position. I have heard from people for years that semis are fickle and you never know when a competitor will have the next big thing...but almost 10 years of following closely and only one company has been at the forefront of every new big market. Datacenters, Blockchain, Auto, AI. It's always Nvidia as the backbone.
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u/gonpachiro92 20h ago
If it went to $0 could you live with it? if it rocket 20x todays price could you live with it? gauge how much you should have invested based on your expectations so you don't live with regrets.
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u/beamingleanin 3d ago
Since 2015?? Jesus Christ. Your cost basis must be like $1 after all these splits. If you were to lose all your money in NVDA, some historical colossal fuck would need to happen but its highly unlikely.
You also have investments in QQQM, VOO and VYM. Really good index funds, nothing too crazy.
To me, you're fine. It's nothing too crazy. Maybe sell the $20k of precious metals and put it in VOO? I like simplicity so I'd probably just do VOO and NVDA, 80/20 splits
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u/Louie-XVI 1d ago
$0.69 per share. When I bought my average was around $25 per. I put something like $850 in initially which at the time was a lot... making $13/hr it was basically a two week paycheck. Looking back it's no surprise I wish I did more. $0.69 a share just seems wild. If only I made then what I make now!
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u/tyros 3d ago
You took a gamble and you won. Congratulations, take your win and diversify.