Key insights
- An individual investor's large, concentrated position in Arista Networks (ANET) presents a portfolio risk. The investor is contemplating whether to reduce their holdings in ANET to diversify and mitigate potential losses, balancing the potential for continued gains against the risk of a significant downturn impacting their retirement savings. The investor's 401k may eventually reduce the overall portfolio risk.
For context, I am about 30 years out from retirement and have two main accounts. The hope is for my work managed 401k to overtake and make this self-managed account far less important/a smaller portion of my funds (mostly because I'm bad at managing this and would rather someone else be in charge). At this point the 401k still has some time before it overtakes this account, so I'm still trying to make sure I don't ruin the larger fund.
I'll be honest, I don't know why/when I picked up ANET, but in a random stroke of luck it is up roughly 600%+ and almost literally carrying my retirement. I don't like the idea of selling the golden goose, but at the same time I know if this single stock crashes, so too does my account with it.
Should I sell some of it to lower my risk, or let it ride, knowing eventually the 401k (hopefully) surpasses this account and lowers the risk that way?