Seeking opinions about the most to have in one investment

[dirtbiker]

Wouldn't it make more sense to just put a trailing stop loss sell order on a stock that has been over-performing (and thus is more than 5-10% of so of your portfolio)? This way if it continues to fly, you get the gains. If it reverses, you sell and keep most of your profit.

[sengsational]

People that had those orders in got fleeced in the flash crash.

[OldShooter]

Quote:

Originally Posted by dirtbiker Wouldn't it make more sense to just put a trailing stop loss sell order on a stock that has been over-performing (and thus is more than 5-10% of so of your portfolio)? ...

Quote:

Originally Posted by sengsational People that had those orders in got fleeced in the flash crash.

This. A stop doesn't guarantee that you'll be out a the stop price. You'll just be in line with all the other stop loss orders looking for buyers. But many of those orders will be managed by professional traders, which you are not.

In fact, a flash crash could result in your being sold out low, then sitting there watching the market recover almost immediately as you totted up your tax bill.

[MRG]

Quote:

Originally Posted by sengsational People that had those orders in got fleeced in the flash crash.

+1

Been there done that. Great way to lock in losses.

[brokrken]

Quote:

Originally Posted by dirtbiker Wouldn't it make more sense to just put a trailing stop loss sell order on a stock that has been over-performing (and thus is more than 5-10% of so of your portfolio)? This way if it continues to fly, you get the gains. If it reverses, you sell and keep most of your profit.

Also, it seems stop losses always execute. You'd be better off just selling at the market price rather than waiting for it to go down to the stop loss price, especially for a particularly volatile stock.

[Fbunt]

75% in Apple. wouldn't recommend it though.

[NoiseBoy]

Quote:

Originally Posted by Fbunt 75% in Apple. wouldn't recommend it though.

At one point last year, Berkshire Hathaway's portfolio was roughly 50% in AAPL. From what I can find this morning, it looks like they've reduced their position in AAPL and it's now ~40% of their total portfolio.

FWIW About 15% of my portfolio is in the stock of my former employer. I stopped buying it years ago except with reinvested dividends, yet it has essentially tracked the broader market and remained at that 15% level. I did sell a small amount earlier this year as I was rebalancing my portfolio in preparation for retirement, but for now I do not have any plans to reduce my position just to hit some "rule of thumb" percentage. My former mega-corp is a DOW stock.

[dirtbiker]

Quote:

Originally Posted by Fbunt 75% in Apple. wouldn't recommend it though.

Quote:

Originally Posted by NoiseBoy At one point last year, Berkshire Hathaway's portfolio was roughly 50% in AAPL. From what I can find this morning, it looks like they've reduced their position in AAPL and it's now ~40% of their total portfolio. FWIW About 15% of my portfolio is in the stock of my former employer. I stopped buying it years ago except with reinvested dividends, yet it has essentially tracked the broader market and remained at that 15% level. I did sell a small amount earlier this year as I was rebalancing my portfolio in preparation for retirement, but for now I do not have any plans to reduce my position just to hit some "rule of thumb" percentage. My former mega-corp is a DOW stock.

At one point in time, AAPL was nearly 50% of my meager portfolio, in 2009. I sold it all to buy a home that I took a 20% loss on, not including closing costs, when I sold it five years later. I also posted about this in the worst investments thread. Lol. Don't I wish I kept it as an outsized portion of my porfolio!!!

[gayl]

I don't really think this should count as it's an index ETF but my largest holding this morning is 87.32% SCHB.

[OldShooter]

Quote:

Originally Posted by gayl I don't really think this should count as it's an index ETF but my largest holding this morning is 87.32% SCHB.

Nope. Doesn't count, as it's a broad market fund. That's almost the only way us little guys can really be diversified.

Emphasis is on "broad market." One or a few stock-picker funds in concentrated market segments is NOT diversification. (Sometimes the hucksters include the word "index" in the fund name. Beware.) So it's not about "funds" being OK, it's about "broad market funds" being OK.

RE "Broad US Market" there are those who think true diversification has to include international markets as well, but that's another thread.

[gayl]

Outside of that, I've got 5% split among 10 individual stocks (AAPL, BAC, CCL, ECHO the largest .... other 6 only 100 shares each) so not heavily invested in any 1 individual stock