Moderate Investor: Tesla Position Too Large

POSITION SIZING CHECK
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Stock: Tesla (TSLA)
Type: Growth
Your Risk Tolerance: Moderate

RECOMMENDATION:
Maximum Position Size: 10% of portfolio ($25,000)
Your Planned: 12% of portfolio ($30,000)

Status: TOO LARGE

⚠️  ACTION REQUIRED:
Reduce your planned investment from $30,000 to $25,000. Trim by $5,000.

WHY THIS MATTERS:
Tesla is a growth stock—high potential but also high volatility. A $30,000 position (12% of your portfolio) exceeds the safe limit for moderate investors. If Tesla drops 50% (which it did from late 2021 to early 2023), a 12% position would cost you 6% of your entire portfolio. At 10%, you'd lose 5%—a meaningful difference that helps you recover faster.

The 10% rule exists to prevent any single stock from dominating your portfolio. Even high-conviction investments should be capped to avoid catastrophic losses.

NEXT STEPS:
1. Invest $25,000 in Tesla instead of $30,000
2. Deploy the remaining $5,000 elsewhere (different sector or asset class)
3. If Tesla appreciates and exceeds 15% of your portfolio, consider trimming back to 10%
4. Ensure your top 3 positions don't exceed 40% of your total portfolio (concentration check)

Remember: This cap protects you on the downside while still giving meaningful upside exposure. At $25,000, if Tesla doubles, you still gain $25,000—plenty of upside without risking too much capital.