Q: I recently read that the hugely over-priced Tesla has been added to the S&P 500. Since I have a significant portion of my retirement funds in an S&P 500 ETF, I am concerned that the value of the ETF will be dragged down once (I think) the Tesla valuation comes down out of orbit. Should I rebalance my holdings to decrease exposure to the S&P 500? Thanks!

A: Certainly, if one stock becomes an outsized part of a market capitalization-weighted ETF, then you need to consider adjusting your overall holdings. That’s especially so if that ETF also makes up a significant part of your portfolio.
Meanwhile, you always need to keep the “Nortel factor”… Read More