I've been given stock shares for a number of years and the stock has done well so I've let it ride. The issue? Now it's right at 50% of my individual trading account balance.

Should I back the 50% down to 20%? Is there a rule of thumb here? And I assume I would just sell the long hold lots with the lowest appreciation to limit the 15% tax hit.

Am I missing anything? My plan is to just leave this on the sideline and come back into an index fund down the road.

Don't carry any individual position more than 10% of the total portfolio. Learned that from a few with heavy Enron positions. It's not worth the risk IMO.

What percent of your total net worth is this?

chris1515 said:

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What percent of your total net worth is this?

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I'm not sure. I'd have to figure it out. I have two rentals and a healthy 401K, Roth and personal savings/checking acct.

But for this personal trading account it's roughly 250K of the 500K total.

Study Bitcoin

Look into an exchange fund

https://www.investopedia.com/terms/e/exchange-fund.asp#:~:text=Exchange%20funds%20pool%20large%20amounts,the%20pool's%20more%20diversified%20portfolio.

50% of your portfolio in appreciated stocks doesn't sound like too much to me.

Hire a financial planner and ask for a review of your holdings and a recommendation based on your goals.

Ok.. You need to be coached up some.

Do you have a full service brokerage account with an account executive? If so, start with him/her.

If no, you might consider a certified financial planner.

50% in one stock is very high risk. It worked out great for Bill Gates and Larry Ellison but it's an all or nothing strategy.

Out of curiosity, which stock is 50% of your portfolio?

AAPL

KatyAggie2000 said:

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AAPL

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Well if I had to have 50% of my portfolio in one stock, Apple, Microsoft or Eli Lilly would be it.

But go ahead and get some advice from an expert or even someone you are close to that's good with money and cares about you.

And consider the boring old Vanguard Index 500 for a portion of your portfolio. It beats all the experts over periods of 15 years and up.

You want as many great investments as you can get. Great stocks/companies, oil and gas mineral/royalty income, real estate, a gold mine, maybe some bitcoin, a rich and generous spouse, a child that's a surgeon etc.. etc.

One thing great you are doing right is you let your winners run! One Apple makes up for a lot of mistakes.

I am, reading that it is 50% of one account, not the portfolio. The % of the portfolio depends on how "healthy" the 401k/ROTH accounts are + equity in rentals. If those are another $500k+ then this 25% or less of the portfolio. But your points about advice are still valid.

OP, keep in mind if you are in an S&P500/target date/total market fund in your 401k/ROTH, you will have more exposure to AAPL than just the individual stocks you are holding. Might want to look up those % to get the full picture.

I have the exact same scenario in one of my accounts, same dollar amounts too. I've had the Apple forever though, it was a 1 time buy back around 2010 or so, my basis is about $10/share. This is an IRA however, no cap gains to worry about. And I have no intention of selling, mainly BC of my other accounts, all of which are bigger. So I'm no help other than to say I'm not selling mine. Now if you're really nervous put in a sell stop for a specific # of shares, specify which shares to sell if it hits, the computer will take care of it for you.

Agree with your thoughts on the way you plan to execute the sell OP. You could consider a shift into a tech heavy etf like vgt or qqq which would provide broader tech exposure but more diversification.

I have heard 10% as the rule of thumb but it sounds like you are comfortable with more and that seems reasonable given Apples strength.

I guess to me, it would depend on what is the source of your worry. Is it that you don't believe strongly in AAPL's future prospects anymore? In that case, it might be worth liquidating a portion of it until the point you don't feel worried anymore (such as selling half or 80% of your holdings). Pay the capital gain tax, and reallocate in a way more to your liking.

If it's a general concern about over-concentration in AAPL or any other stock, you may want to investigate "insurance" or hedging the position, such as buying significantly out-of-the-money put options (maybe long-term LEAPS). In a catastrophic situation, such as AAPL losing half it's value, you will be at least partially insulated from the decrease (the value of the puts would rise), and on the other hand, if it keeps going up, you are only out the put option premium you paid, which can be less than a few pennies on the dollar if you structure it right. I just looked at January 2026 $90 Put LEAPS priced at around $0.98 per contract, So, $98.00 "insures" $17,500 worth of shares. This way, you don't need to sell the shares and pay the tax, but still solve some of your worries about over-concentration. You can pick a strike price and expiration that best reflects your risk/return situation.

Just another perspective to consider.

For what it's worth, my portfolio was 80% AAPL for years. Then I divested some of my AAPL and bought NVDA. Candidly, you've done very, very, very well. Congratulations.

Just my opinion (which will be in the minority, which is OK). The biggest mistake I ever made in investing was having my funds professionally managed. Our perspectives never aligned. Should you go that route, interview them and go with the one that best aligns with you.

Nothing wrong with a Tech driven ETF (I own QQQ). But finally, consider this....Warren Buffett has a highly concentrated portfolio of stocks. As of 12/31/2023, 50% of his portfolio was in AAPL.

Good luck with whatever you do.

OldArmyCT said:

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I have the exact same scenario in one of my accounts, same dollar amounts too. I've had the Apple forever though, it was a 1 time buy back around 2010 or so, my basis is about $10/share. This is an IRA however, no cap gains to worry about. And I have no intention of selling, mainly BC of my other accounts, all of which are bigger. So I'm no help other than to say I'm not selling mine. Now if you're really nervous put in a sell stop for a specific # of shares, specify which shares to sell if it hits, the computer will take care of it for you.

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Yep, just checked. My lowest cost basis on my biggest lot (company share grant) is $19 from January 2014. Lol.

Another poster made a good comment. I was worried about being heavy Apple concentrated in my personal trading account, which I am, but when I factor in my 401K, Roth, rental streams, etc. it backs way down. I wasn't thinking of it from a total "portfolio" perspective.

QQQ

Besides what others have mentioned, that you are probably way overweight aapl due to its likely presence in any funds you might hold, i don't think anybody's mentioned the general philosophy that your employment alone is more than enough exposure to any one company (i.e. not only do you have a bunch of stock, but every paycheck relies on the health of the company) . I've known lots of people who sell/exercise stock grants as soon as they mature just for that reason, so that they can diversify. However, none of those people worked for apple...

ToddyHill said:

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For what it's worth, my portfolio was 80% AAPL for years. Then I divested some of my AAPL and bought NVDA. Candidly, you've done very, very, very well. Congratulations.

Just my opinion (which will be in the minority, which is OK). The biggest mistake I ever made in investing was having my funds professionally managed. Our perspectives never aligned. Should you go that route, interview them and go with the one that best aligns with you.

Nothing wrong with a Tech driven ETF (I own QQQ). But finally, consider this....Warren Buffett has a highly concentrated portfolio of stocks. As of 12/31/2023, 50% of his portfolio was in AAPL.

Good luck with whatever you do.

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Warren has more cash than Apple stock. But his Apple % is high due to performance, not necessarily purchases. He also lighted up a bit recently.

Are you charitably inclined?
If so, consider a donor advised fund and donate shares of Apple. Possibly stack multiple years of donations.

Thus giving more tax write offs now and also avoiding capital gains on the sale of the Apple.

Could also consider selling some Apple and look into opportunity zone to defer the taxes two years. But not sure if that helps a ton.

I can't understand when there are thousands of choices of what to invest in, that anyone would bet 80% of their assets on APPLE

especially when MSFT has been beating it by a wide margin. much less NVIDIA and SuperMicro.

I've gone against all sound advice and kept 90% in one stock, and this is the result:



I know I should dump most of it and diversify, but I said that in 2009, 2011, 2014, 2016, 2020 and 2021. Cashed out more in the last 2 years from this than the previous 20 years prior. I know I should reduce the risk, but just can't get away from this. Could I do better with some diversification? I guess. I know it's "wrong" to be in this position, just hard to destroy it all.

Totally get what you're saying. At one point 80% of my funds were in AAPL. Today it's more like 10% to 15%. And thanks for mentioning MSFT and NVDA. I own both.

Congrats CapCity! Nothing wrong with what you've done!

CapCity12thMan said:

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I've gone against all sound advice and kept 90% in one stock, and this is the result:



I know I should dump most of it and diversify, but I said that in 2009, 2011, 2014, 2016, 2020 and 2021. Cashed out more in the last 2 years from this than the previous 20 years prior. I know I should reduce the risk, but just can't get away from this. Could I do better with some diversification? I guess. I know it's "wrong" to be in this position, just hard to destroy it all.

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Great job, and great success!

That said, one quick way to "destroy it all" is to refuse to diversify. Prudent work to reduce your reliance on one holding should be a priority, whether that is reinvesting dividends elsewhere, pruning 5-10% of your holdings a quarter, or some other method would be wise. I am close to people who have had 80%+ of their portfolio in one stock (companies like Enron, BP Amoco, and AIG), and it did not end well for them. They were all high-flyers at one point, but things do change, and diversification is a prudent move.

100% agree. Easier said than done - at least for me. It just continues to deliver. I'm not much of a trader (clearly) but perhaps it makes sense to put in some trailing stop losses or something to keep the protection moving upward.

CapCity12thMan said:

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100% agree. Easier said than done - at least for me. It just continues to deliver. I'm not much of a trader (clearly) but perhaps it makes sense to put in some trailing stop losses or something to keep the protection moving upward.

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I use a trailing stop sometimes when I'm ready to exit, but want to capture any last minute moves. Depending on how tight you set the trail, it can be frustrating (you always feel like you're leaving something on the table), but it really helps if it goes into short-term free fall. Like I said before, you may want to just incrementally downsize your holdings - don't feel like you have to do it all at once (it's kind of like reverse dollar cost averaging).

I think someone mentioned it earlier, but if you have any charitable gifting to do, you can donate some of this position to avoid paying the capital gains tax (and take the cash you would have gifted and diversify with that).

Good luck!

CapCity12thMan said:

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I've gone against all sound advice and kept 90% in one stock, and this is the result:



I know I should dump most of it and diversify, but I said that in 2009, 2011, 2014, 2016, 2020 and 2021. Cashed out more in the last 2 years from this than the previous 20 years prior. I know I should reduce the risk, but just can't get away from this. Could I do better with some diversification? I guess. I know it's "wrong" to be in this position, just hard to destroy it all.

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Brk.B?

Justice Department to Sue Apple for Antitrust Violations as Soon as Thursday

Quote:

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(Bloomberg) -- The Justice Department is poised to sue Apple Inc. as soon as Thursday, accusing the world's second most valuable tech company of violating antitrust laws by blocking rivals from accessing hardware and software features of its iPhone.

The suit, which is expected to be filed in federal court, according to people familiar with the matter, escalates the Biden administration's antitrust fights against most of the biggest US technology giants. The Justice Department is already suing Alphabet Inc.'s Google for monopolization, while the Federal Trade Commission is pursuing antitrust cases against Meta Platforms Inc. and Amazon.com Inc.

Apple and the Justice Department didn't immediately respond to requests for comment. The people familiar asked not to be named discussing a confidential matter.

Apple shares fell as much as 1.4% to $176.10 in late trading on the news. They had been down 7.2% this year through Wednesday's close.

The coming case will mark the third time that the Justice Department has sued Apple for antitrust violations in the past 14 years, but it is the first case accusing the iPhone maker of illegally maintaining its dominant position.

The lawsuit comes as Apple also is coming under increasing scrutiny in Europe over alleged anticompetitive behavior. The company was hit with a 1.8 billion fine this month for shutting out music streaming rivals from offering cheaper deals. Apple's appealing the penalty and has said that regulators failed to uncover any "credible evidence of consumer harm."

Meanwhile, the company may face a full-blown investigation under the EU's new rules for Big Tech the Digital Markets Act which went into force earlier this month. Rivals have dinged new App Store rules that came into force in Europe, complaining that changes are likely to result in higher prices for developers. Penalties for failing to comply with the EU's new rules can be severe - as much as 10% of a company's annual worldwide revenue or up to 20% for repeat offenders.

The Justice Department opened the latest case in 2019 under former President Donald Trump. The antitrust division, though, chose to prioritize twin cases against Google, taking a back seat as Fortnite maker Epic Games Inc. sued Apple for monopolization in 2020 and that case worked its way through the federal courts.

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https://finance.yahoo.com/news/justice-department-sue-apple-antitrust-212239046.html

P.H. Dexippus said:

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Justice Department to Sue Apple for Antitrust Violations as Soon as Thursday

Quote:

---

(Bloomberg) -- The Justice Department is poised to sue Apple Inc. as soon as Thursday, accusing the world's second most valuable tech company of violating antitrust laws by blocking rivals from accessing hardware and software features of its iPhone.

The suit, which is expected to be filed in federal court, according to people familiar with the matter, escalates the Biden administration's antitrust fights against most of the biggest US technology giants. The Justice Department is already suing Alphabet Inc.'s Google for monopolization, while the Federal Trade Commission is pursuing antitrust cases against Meta Platforms Inc. and Amazon.com Inc.

Apple and the Justice Department didn't immediately respond to requests for comment. The people familiar asked not to be named discussing a confidential matter.

Apple shares fell as much as 1.4% to $176.10 in late trading on the news. They had been down 7.2% this year through Wednesday's close.

The coming case will mark the third time that the Justice Department has sued Apple for antitrust violations in the past 14 years, but it is the first case accusing the iPhone maker of illegally maintaining its dominant position.

The lawsuit comes as Apple also is coming under increasing scrutiny in Europe over alleged anticompetitive behavior. The company was hit with a 1.8 billion fine this month for shutting out music streaming rivals from offering cheaper deals. Apple's appealing the penalty and has said that regulators failed to uncover any "credible evidence of consumer harm."

Meanwhile, the company may face a full-blown investigation under the EU's new rules for Big Tech the Digital Markets Act which went into force earlier this month. Rivals have dinged new App Store rules that came into force in Europe, complaining that changes are likely to result in higher prices for developers. Penalties for failing to comply with the EU's new rules can be severe - as much as 10% of a company's annual worldwide revenue or up to 20% for repeat offenders.

The Justice Department opened the latest case in 2019 under former President Donald Trump. The antitrust division, though, chose to prioritize twin cases against Google, taking a back seat as Fortnite maker Epic Games Inc. sued Apple for monopolization in 2020 and that case worked its way through the federal courts.

---

https://finance.yahoo.com/news/justice-department-sue-apple-antitrust-212239046.html

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Did Nancy buy aapl puts?

Does Apple need to up their dei score even more?

yes we have a DAF we use for charitable donations - miss the cap gains tax and get the contribution benefit