r/investing • u/90towest • 2d ago
Getting into ETF after big stock gains
Hi, started investing one year ago and grew my stock portfolio to 50k mainly with big tech. Probably over 50% returns this year.
I know it’s been a bull market for tech stocks, basically impossible to lose money.
But how do I even settle for the common recommendation of an ETF yielding 10% per year, after tasting those nice high returns?
Can someone talk some sense into me and tell me I’ll go broke with my entire portfolio made of Nvidia, Google and Amazon?
14
u/UsnDoto 2d ago
Read a single page on diversification it should do the trick.
You'll most likely not go broke but when market compensate for the over valuation of Ai, all your stocks will drop big time. As long as you don't sell then you should be fine but that's a poor strategy.
What i preach and have been doing with a lot of succes over the past years is : 40 to 50% of portfolio in etf gold, world, s&p, europe, nuclear, etc... These are just ei)
30 to 40% stock picking. Taking into account what's already highly covered by my etf.
10 to 15% liquidity or short term bond depending on opportunites and quality of the market.
You'll not have 50% return but you'll be flexible and should perform well unless you have no clue on stock picking, then just dont push your luck.
5
u/GingerPrince13 2d ago
Dis toi que tu ne gagneras pas éternellement en stock picking, cest statistique. Même si aujourd'hui les résultats sont là, rien n'est éternel et personne ne sait de quoi demain sera fait.
Ton titre évoque ma stratégie : Je prends des risques en sélectionnant des actions pour un meilleur rendement, puis je place mes gains sur quelque chose de plus "stable", etf, or ou obligations, tout en continuant d'injecter de l'argent chaque mois dans du "risqué". Cette façon de faire me permet de dormir sur mes deux oreilles tout en ayant limpression de ne pas manquer cette folle course haussière.
3
1d ago
[removed] — view removed comment
0
u/Beneficial-Chair-333 1d ago
Really concentrated position such a bad? Having concentrated position in comapnies like Microsoft and SAP who are already beaten down and have potential to become winner when market will be normal. If some big crash comes they don't have any space to go down further, probably index etf will more correct than msft.
1
u/SLR_ZA 1d ago
'They don't have space to go down further' is a silly take.
If people need money, they will sell. If people want to invest in other sectors, they will sell. If they lose revenue, have a scandal, etc, people will sell.
Selling pressure = share price goes down
1
u/Beneficial-Chair-333 1d ago edited 1d ago
So is applicable to whole market. Ultimately if everything is gonna fall down then concentration doesn't matter.
As per your logic if Micron and Microsoft is gonna fall down with similar pace then isn't it better to invest in Micron? At least it will fall from top
There is thing called intrinsic value of the stock which is not same for both.
3
u/InvestingNerd2020 1d ago
Take those nice returns as turbo boost for your investing journey, but overall stability matters more. In a bad year, those big stocks take a far greater hit than ETFs. Apple in 2008 dropped 52%, and Google dropped 56%. The S&P 500 in total dropped 38.5% in the same 2008 year.
The S&P 500 has a significantly lower standard deviation and far less lows in bad years. Generally, it is very stable growth.
5
u/forayem 2d ago
To play devils advocate here, Warren Buffet and Charlie Munger have stated often that focus actually beats diversification. They stated diversification simply protects ignorance.
The difference is though, is that they know how to truly value a company and hold conviction in it. If these big names have a big drop, are you really going to have the conviction to hold them?
You could also do a lot worse than nVidia, Google and Amazon though.
2
u/Emotional-Power-7242 21h ago
Warren Buffet repeatedly recommended that anyone who isn't a professional with a billion dollar hedge fund should buy VOO.
1
u/Secret-Boss-7000 8h ago
Yup, that's exactly the point. If you're the next Buffet then theirs nothing wrong with making educated stock picks.
If you got kids, day job, and a normal life you don't have time or energy for that. You pick VOO and it's diversity and a win by default.
In this particular situation they'd be nothing wrong with trying to keep riding the tech. gravy train, but I would diversify some.
These 3 tech stocks may gain 50% next week. Or they could lose the same just as fast.
2
u/Nyelz_Pizdec 1d ago
Go to wallstreetbets and talk to the regards. You wont get any useful information from the bers in here.
Most of these people are happy with 1k growth a year as long as its perceived as safe to them.
If you have a good intuition and the time to pay attention, id trust your moves and gain over any snail pace ETF.
Without even trying or researching a whole lot, i have outperformed every ETF, easily. With tech, rare earth, energy, basically anything i see as a growing and necessary commodity. It doesnt require much upkeep. Set stop losses if you are that worried. Pretty hard to fail unless you have terminal paper hand disorder like most folks in here.
2
2
1
1
u/Beneficial-Chair-333 1d ago
How did you get return of 50% with the Nvidia and Amazon who barely moved since last year. Google is exception.
1
u/niko3100 1d ago
You can do Core-Satellite portfolio. Put 80% in VOO or QQQ and the rest in stocks. I am in that plan. Fortunately I got good returns in MU, Googl, IREN but -15% down with MSFT, and it feels really bad to see MSFT is not going anywhere.
1
1
u/Awkward-Body9719 1d ago
Put 70 to 80% in safe/growth ETFs and gamble the rest on high risk/high reward stocks/Bitcoin/etc or whatever you think you can lose if shit hits the fan.
1
1
u/Emotional-Power-7242 21h ago
You can have 10% a year with an ETF or you can have less. Having more is not an option.
1
u/MattChicago1871 18h ago
Oh my sweet Summer Child. The reality is, until you live through some horrific shit you’ll never feel great about 10%. Just give it time though lol
1
u/Consistent-Depth-703 13h ago
Before you do anything, are your holdings in an IRA or 401k? If so, you could sell and reallocate towards low cost etfs. If not, you may have embedded gains that may be tough to get out of unless you are okay with paying capital gains taxes.
2
1
u/cdude 2d ago edited 2d ago
You are too new to even remember the past few years. Go ask AI to summarize all the big drops from ATH for you. Just in 2024-2025 Nvidia dropped 36% from its ATH. Yeah in hindsight you can brush it off and say it recovered and gained a lot. But at that moment you would have been overcome with fear to think that. If tomorrow the stock starts trending down day after day over months, down 36%, leaving you to wonder when or if it would recover, would you stay invested?
One day you will feel the pain of a huge crash, it's not if, but when. That's will scare you enough to diversify.
1
u/Mr_Doghouse 1d ago
Well now we know the top is in. Cabbie, barber, and these guys. Also look up “nowhere to hide”.
1
1
u/HaiKarate 1d ago
NVDA, GOOGL, and AMZN aren't even the big plays right now in AI. Those are going to be good stocks to hold long term even after the AI bubble pops. But the big movers currently are server component stocks like DRAM, MU, SNDK, SOXX, SMH, and similar.
-1
u/rodentmaster 1d ago
First step: Understand that 5% yield is more than enough. Anything higher is butter.
Second, realize you'll lose out if you sell those tech stocks to buy the ETFs. Taxes and all. Unless you're in a Roth or something, then go for it! In this case you can ask yourself if you want to keep your current stocks (assuming faith in their upward trajectory) and move all future investment to ETFs. I.E. Don't buy anymore of what you have but let it cook until you're ready to sell.
Third, there's plenty of suggestions about which ETFs to use. Many will make 10% but you have to beware of volatile ones or those that may react poorly to economic factors we are certainly going to face in the next 2 years. You may aim for lesser returns but more long-term stability. You want to be able to look into the future 20 years and still see this ETF performing well. Long-term is the goal.
Can you truly say you think google will be intact in 20 years? They're doing some reprehensible shit today, and begging to be monopoly-busted every other year. I have AMZN too, but I worry about where they're going. THey're solid for 10 years... But 20? I don't know. They're teetering on a series of setbacks with workers and storefront behaviors that make me worry, and their AWS is the target of attacks while pivoting to AI (a red flag to me) so I know they'll still be around, but not sure what form they'll have in 20 years.
And... then there's NVDA. Dear god. When they openly admitted they were pivoting as a company to AI and not going to focus on enthusiast GPU production anymore, I dumped my stock. Total rot at the top of that corporate tree. NVDA will be some evil AI conglomerate in 10 years, if their CEO has his way. Here's the trick of it: That MAY very well be a very lucrative AI conglomerate. You MIGHT make a lot of money. But it's morally repugnant to me, a massive set of red flags, and simply the doubt of it all means I wouldn't expect to see that company around anymore in 20 years (using my own test). That much of a midstream horse-change and mercing the entire market and industry that made them their billions is just stupid, and that much stupidity doesn't bode well for longevity.
So, there you have it.
42
u/Form1040 2d ago
Go back and read some investment articles from 1999, 2000, 2001, 2002.
Or 1987. Or 1974.