MW I'm in my 30s and half my money is in Vanguard's Information Technology ETF. Is that risky?
By Aditi Shrikant
'I was told as a kid to just put money into index funds or individual stocks, leave them alone and never sell'
"I'm worried I may not be diversified enough and may fare better selling and redistributing into less risky index funds." (Photo subject is a model.)
Dear Dollar Signs,
I'm in my mid-30s. I have about half of my retirement account and individual stocks in the Vanguard Information Technology exchange-traded fund (98% technology). I parked them there years ago and planned to never touch them, but now I'm wondering if this is a risk that older, wiser investors would warn against.
I've never had a financial adviser. I was told as a kid to just put money into index funds or individual stocks, leave them alone and never sell. What would more seasoned investors do? I'm worried I may not be diversified enough and may fare better selling and redistributing into less risky index funds.
P.S. What are your favorite "set and forget" index funds? I currently hold the Vanguard S&P 500 ETF VOO and the Invesco QQQ Trust Series I QQQ alongside the Vanguard Information Technology ETF.
Antsy Investor
If you're just starting out on your money or career journey and have questions about how to navigate your finances, we want to hear from you. Write to Dollar Signs, MarketWatch's new advice column, at dollarsigns@marketwatch.com.
Dear Antsy,
You're already being pretty smart with your money. Being in your mid-30s and invested in three index funds is impressive.
Your instinct to diversify is a good one, but I want to make sure you're doing a couple of other things first. Are you taking full advantage of your employer's matching program? And, if possible, are you maxing out contributions to your IRA at $7,500 and your 401(k) at $24,500? You should aim to contribute at least 10% of your income toward retirement and gradually work your way up to 20%.
After that, you can focus more on diversification. Right now, you do have a lot of eggs in one basket. But if half of your retirement savings is, say, $10,000, that's not necessarily a problem. Diversification becomes more important as you accumulate a larger portfolio, says Mark La Spisa, a certified financial planner based in Barrington, Ill.
"I would usually tell people that until you exceed one or two times your annual income, I wouldn't worry too much about diversification," he says. "Once you start passing that number, then you need to start thinking more seriously about it."
While his comment makes sense, it's all relative. Many young investors would see a portfolio of, say, $50,000 as significant and want to ensure it's diversified. If it went down by 80%, that would be a huge hit in both dollar and percentage terms.
So, yes, you may want to make some changes. If you're concerned that your portfolio is too tech-heavy, you could lean more toward the Vanguard S&P 500 ETF. This fund tracks the S&P 500 SPX index, which is weighted by market capitalization, meaning Nvidia (NVDA), Apple $(AAPL)$ and Microsoft $(MSFT)$ together currently make up about 19% of the fund's portfolio.
Your own risk tolerance should also help guide how you allocate your investments from here. Your strategy of investing in the Invesco QQQ Trust Series I QQQand the Vanguard IT ETF VGT, both of which have high concentrations in technology stocks, has worked out very well over the past few years. However, there's quite a lot of overlap between the three funds you hold.
Don't discount how stressful a down market can be for an investor. In 2022, the S&P fell by 19%, its worst performance since 2008. Your three funds all declined significantly during that year.
Ask yourself: Was that period difficult for you? Did you worry about your investments from day to day? If you stayed the course and kept investing, you likely ended up with a larger portfolio after the market recovered, because you were buying shares at lower prices during the downturn.
If you find yourself worrying about your investments every day, you might consider a more conservative allocation, such as the Invesco S&P 500 Equal Weight ETF RSP. You could also branch out into funds focused on value stocks - companies that trade at lower-valuation multiples relative to earnings, revenue or cash flow. There are many value-oriented index ETFs, including the Invesco Large Cap Value ETF. You could also consider a total stock ETF, which tracks the performance of the entire stock market, including large-cap, midcap, small-cap and microcap companies.
Like I said, though, you already sound incredibly savvy. Whether you continue with your current strategy or diversify a bit more, I'd bet you're setting yourself up well for retirement.
Write to Dollar Signs at dollarsigns@marketwatch.com.
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-Aditi Shrikant
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May 22, 2026 11:20 ET (15:20 GMT)
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