11H
I am not a fan of not letting profits run further just because the share in the portfolio increases disproportionately.
Three questions you should ask yourself:
1. do you believe in the stock's long-term future? (Or is it just a bet for you, where you are secretly relieved when you have realized the profit?)
2. do you not really need the money? (In other words, is it worth paying tax on these high profits now just to reinvest them later?)
3. do you have the patience to sit out a setback (for years if necessary)?
If you can answer yes to all three questions, then screw the disproportionate share in the portfolio.
Three questions you should ask yourself:
1. do you believe in the stock's long-term future? (Or is it just a bet for you, where you are secretly relieved when you have realized the profit?)
2. do you not really need the money? (In other words, is it worth paying tax on these high profits now just to reinvest them later?)
3. do you have the patience to sit out a setback (for years if necessary)?
If you can answer yes to all three questions, then screw the disproportionate share in the portfolio.
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@Daffy Thank you for the feedback and the idea with the three questions - I also find that very exciting. I will keep these three questions in mind. However, even if I generally agree with you, this is not a universal rule. Because in my case, for example, I would answer "yes" to all three questions for an NVIDIA. Nevertheless, it may not be the most sensible or economical decision to leave everything invested in NVIDIA instead of selling part of it now and investing in a few other, smaller growth stocks. Because even if NVIDIA were to rise to 10 trillion, that would "only" be a doubling or a 2.5-fold increase. In contrast, there are significantly higher opportunities with another share that is perhaps still in the sub-10 billion market capitalization range. Catching a Palantir at 5 US dollars is quite different from continuing with NVIDIA.
Of course, it is indeed difficult to catch a real 10 or 20 bagger. But I believe that if you diversify a little - as fund managers do - by investing in ten potential "unicorns", then it is enough for one of them to become really big to more than compensate for the weaker investments.
Of course, it is indeed difficult to catch a real 10 or 20 bagger. But I believe that if you diversify a little - as fund managers do - by investing in ten potential "unicorns", then it is enough for one of them to become really big to more than compensate for the weaker investments.
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•@Alexxela...all perfectly understandable trains of thought. I think the important thing is that you feel comfortable with it.
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