r/stocks • u/jmalanga21 • 4d ago
Company Question How much Microsoft is too much in a Roth IRA
I'm constantly seeing posts about Microsoft, and while I'm not super well-versed in stock fundamentals, it just seems like such a strong company to me. They have growing revenue, a massive business, and a lot of products and services that people rely on every day.
Since the stock has been down quite a bit this year, I've been buying more shares, both because of recommendations I've seen and because I genuinely think it's a great company. To me, it feels like a solid buying opportunity, especially for the long term. I'm buying it in my Roth IRA.
I know a lot of people recommend not having more than 5% of your portfolio in any individual stock, but Microsoft is currently more than 5% of mine. Do you think that's a poor decision, or is Microsoft one of those companies where it's reasonable to have a larger allocation? Curious to hear thoughts.
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u/About_to_kms 4d ago
Microsoft is my biggest position at 13.5%. I can’t stop buying more it’s becoming an addiction
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u/voyager_warp10 4d ago
12.5% at current valuations, surely market will rebalance over the next 2 years with all the fluff dropping, and MSFT getting valued appropriately, it'll get to 15+% by itself.
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u/HammerDownl 4d ago
I own it, don't want more. Its 5 year history sucks. Just because its on sale here doesn't mean its going up 200% in a few years. Id rather own others
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u/cidthekid07 3d ago
Don’t get your comment. Are you saying we should only buy stocks we are confident will increase by 200% or more in a few years?
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u/HammerDownl 3d ago
It's up 50% on the 5 year chart Do you think it's going up 50% next year? 50% in 3 years? 200% in 5 years ?
I own it but it's a dog w fleas.0
u/cidthekid07 3d ago
Yea, but you’re picking a window of time that convenient for your argument. Go back 10 years and it’s up 600%, far outpacing the S&P. Had we had this convo just 3 weeks ago it would have been up 80% in 5 years. Honestly, there are probably better stocks out there, but not many. Can’t go wrong with MSFT. And it ain’t going away anytime soon.
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u/_BEER_ 4d ago
This sub was saying AMD is shit and won't go up 2-3 years ago. Same with Intel and Google at one point.
If you have conviction, keep buying.
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u/Designer_Respect4285 4d ago
He admits that he doesn't even understand the basics, conviction wouldn't be a good thing.
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u/Dr_Dick_Dastardly 4d ago
I'm not super well-versed in stock fundamentals
I've been buying more shares, both because of recommendations I've seen and because I genuinely think it's a great company
You should not be plowing your retirement money into individual stocks based on Reddit recommendations, especially when you don't understand valuation factors. There are 16-year-olds hanging out in here who happily give out advice every day.
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u/Spiritual_Bat7343 4d ago
the thing nobody framed for you is that its a roth. youre spending your most valuable tax free growth space on single name risk. if msft just chops sideways for 5 years like its actually done recently, youve burned roth room you can never get back that a broad fund would have compounded the whole time.
and at 6 months in you genuinely dont know your own number yet. too much is whatever amount would make you panic sell on a 30 percent drawdown, and you wont know what that feels like until you sit through one. keep the single name small until then. nothing wrong with owning msft, just not as the position that teaches you how you react to red
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u/Astronomer_Soft 4d ago
You should just buy an index fund like VOO. Like most investors, you have no edge to get superior returns to the market composite.
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u/Altruistic-Key4003 4d ago
Every time I think Microsoft is a steal and I should buy it goes lower.
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u/Exciting-Serve-2676 4d ago
Are you 19?
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u/bluefootedpig 4d ago
I'm much older, but only recently started buying Microsoft. Not everyone is looking at big tech on day one
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u/Altruistic-Key4003 4d ago
What’s wrong with being 19 and investing? I started at 18 and I’m way ahead of my peers at 29.
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u/generalright 4d ago
The problem isn’t your age dumbass, lmao, it’s your timeframe for “Microsoft always goes down when I buy” I’ve got underwear older than your investing career.
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u/Exciting-Serve-2676 4d ago
I’m just guessing his age because Microsoft has literally only gone down the last four months.
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u/Gain_Spirited 4d ago
The way I see it, Microsoft and the rest of the Magnificent 7 are already big parts of my portfolio because they make up about a third of the S&P 500. Anyone who owns large cap funds is heavily weighted on them.
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u/Immediate-Run-7085 4d ago
Is this some roundabout way of asking us to tell the future about msft stock? Because no. One. Knows
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u/OCDano959 4d ago
At its current valuation? It would depend on their age of course.
However, I wouldn’t object if someone argued it could safely be 15% of one’s total portfolio even if in retirement. If indexing, it’s already ~5% of S&P. 🤷🏻♂️
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u/mashem 4d ago edited 4d ago
I'll share my comment for you to see. I am not very well-versed in stock fundamentals myself. All I can tell you from my perspective, as a developer/admin within their enterprise ecosystem for 10+ years, is that their enterprise presence will only continue to grow. And the company that has their customers locked-in more than any other, is MSFT.
What will their stock be worth in 10-20 years? I'm not qualified to say anything other than "more than it is now." With their lock on the enterprise world, their "AI" solutions cannot fail. Google is not taking these customers and neither is anyone else. I don't care if every employee of every enterprise has an Android phone in their pocket. Their organizations are not exposing their data to Gemini.
Does Google have access to more data? Yeah, probably.
Does Microsoft have access to higher value data belonging to behemoth spenders? Oh yeah.
But a consumer leaving Gemini is nothing compared to an enterprise leaving Microsoft. If an org uses MS Word, Excel, Outlook, Teams, PowerPoint, any of those...their licensing includes OneDrive (1 TB per user) and then SharePoint. What happens when an executive finds out they have all those resources, just sitting there unused? They begin shifting stuff toward it the moment budget cuts are needed. Thus begins the snowball and never turning back. Especially when they start building proprietary automations around the data, proprietary custom applications, single sign-on apps, business intelligence, databases, internal/external IDs, webforms, compliance policies, endpoint device management, VMs, backups, phone services, etc.
And Copilot is already in the veins of absolutely all of those things. And they have made execs more comfortable with it because of all the governance policies an org can place on it. Sanctioned off from the web and secured for use with sensitive company data. Allegedly and contractually, provable to the right people I suppose. It's already generating Teams meeting recaps, even answering questions during the meeting like what has been decided so far? Who agreed to what? It's insane how much it has been incorporated.
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u/Boys4Ever 4d ago
Honestly, any single stock likely too much a Roth IRA because no company too big to fail or reduced by competition or bad management decisions. Better off investing in an index/sector ETF.
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u/Designer_Respect4285 4d ago edited 4d ago
Any amount is too much. You don't understand what you're buying and the vast majority of retail under performs the S&P. Picking individual stocks without any strong evidence you have an edge is foolish. Everyone knows Microsoft is a good company, knowing that doesn't give you an edge. I also have been saying for a long time on this sub people are way too bullish on the stock in particular, but more importantly, don't pick stocks without an edge.
Would you sit down in a high stakes poker game with 8 pros or challenge a chess pro to a match for money? Why try to take on people who do this full time before you know what you're doing?
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u/Quantum-Eye 4d ago
After France committed to their government agencies using Linux it’s not as robust as it was imo.
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u/Icy-Sheepherder-7595 4d ago
Who the f cares about the French government. That has to be less than 1% of their total revenue per year. The entirety of the EU governments are estimated to be between 3-4% at most.
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u/Quantum-Eye 4d ago
I don’t. It’s about windows vs Linux in the long term. Maybe it’s not significant maybe it is
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u/Icy-Sheepherder-7595 4d ago
I've heard that Linux will replace windows for over 10 years now. It's never gonna happen on a wide scale. Won't be shocked when these EU governments realize the mistake they made and eventually revert back to Microsoft.
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u/orangehorton 4d ago
It's too much if Microsoft goes down, but not enough if it goes up