Young Banker Holding $58K Portfolio Sees Red – 'Reallocate Into VOO Or Hold On To It And Ride It Out?' – Reddit Explodes

Investing might look easy for some, but that isn’t always the case. For a young investor with a long time horizon, the decision to hold onto individual stocks or shift into broad-market ETFs can be pivotal.

While concentrated bets on high-growth companies can yield amazing returns, they also come with heightened volatility and sector risk. On the other hand, index funds provide stability and market-matching returns but may lack the explosive upside of single-stock picks.

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The debate becomes even more pressing when an investor is sitting on unrealized losses. Should they cut their losses and reallocate, or hold firm, trusting their long-term goal will come to be? The answer often depends on risk tolerance, time horizon, and the strength of their investment motivation.

One Reddit user, a 23-year-old investment banker, has shared his concerns regarding his portfolio on the online discussion board. The poster has a $58,000 portfolio but is currently down around $4,000 on his holdings.

His portfolio is heavily concentrated in tech giants, including Alphabet GOOGL GOOG)), Amazon AMZN​, Microsoft MSFT, Nvidia NVDA, and Meta META, alongside Vanguard S&P 500 ETF VOO and Berkshire Hathaway BRK BRK.B)).

The poster shared that he can save $6,000 per month from his salary, allowing consistent investments, and he’s in for the long run. He’s also acknowledged that his portfolio is tech-heavy but says he plans to dilute exposure by dollar cost averaging into VOO monthly. Although he’s down on his Magnificent 7 stocks, he is unfazed, saying it is a great discount opportunity.

“I see this as a perfect opportunity to pick up more shares of great companies at discounted prices. I'm down close to $4,000 so far from my Mag7 holdings. Do you suggest I sell at a loss and reallocate into VOO or hold on to it and ride it out?” he asked.

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The comment section exploded with mixed opinions, so let’s dive into those.

Reallocate Mag7 Stocks Into VOO Or Hold On It And Ride It Out?

Sell Individual Stocks and Go All-In on VOO or Diversified ETFs

Many commenters argued that the investor's portfolio lacks diversification and overlaps with VOO's top holdings, making it redundant.

“Buy VOO and you'll have all of those under one position,” a comment reads.

“Terribly un-diversified. Just buy an index fund. It has all those,” another Redditor suggested.

This user recommended selling individual stocks and adding global diversification to the portfolio.

“I will suggest more ETFs. VOO is already overweight in the individual stocks you have, for the most part, so your diversity is lacking. Personally, I would sell all except for VOO and BRK.B and get some international in there,” he said.

“I would recommend diversifying with some sort of index fund or ETF. I wouldn’t sell at a loss unless you are cashing anything out and tax loss harvesting later in the year,” a comment reads.

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Hold High-Conviction Stocks but Increase VOO Allocation Over Time

Other Redditors argued that the poster’s long time horizon and high conviction justify keeping his Mag7 stocks while gradually increasing VOO exposure.

“I’d heavily caution against selling anything here. If you sell anything, immediately reinvest back into your VOO ETF or your high-conviction Mag7 stocks. The Mag7 will likely outperform the broad market for a long time. Study past “monopolies” and how long they outperformed before being disrupted (the answer is decades),” a Redditor suggested.

A commenter recommended keeping a middle-ground approach, namely keeping tech exposure but adding diversification.

“Good job, young rich homie. I’d suggest a Mag7 ETF and a diversified ETF investing in international markets, too. Diversification is the only free lunch in investing. Good luck!”

While supporting holding strong companies, this Redditor suggested making VOO the portfolio’s foundation: “A little concentration on tech. However, you own great companies and you are 23, so keep them and buy more at a discount! VOO is great as a core holding and should be the biggest slice of the pie as your portfolio grows.”

As a compromise between stock picking and diversification, a Redditor suggested a tech-heavy ETF.

“Instead of investing in the Mag7 by themselves, why not add [Invesco NASDAQ 100 ETF QQQM]? It has a lower expense ratio than [Invesco QQQ Trust QQQ] and it holds large tech companies, which seems to fit your philosophy at the moment. If you want growth, it's also best to diversify. How about some international exposure? [Vanguard Total International Stock ETF VXUS] is a great ETF, and [Vanguard Total World Stock ETF VT] also has some international exposure,” he said.

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