Locked out

My dumbest investment move was selling my shares of Shopify when they were at $150. (They’re close to $1,500 now!) I’d bought them for around $30 apiece and wanted to “lock in” my gains. I’ve since learned to let my winners run. — K.M., online

The Fool responds: Locking in gains, at least some of them, is not a silly thing to do. When you have a huge winner, it grows to make up a much bigger portion of your portfolio, leaving you with many eggs in one basket. Your financial future could depend to a great degree on that one stock, which is risky. Some experts do suggest letting your winners run — after all, a company with huge gains may keep growing for many more years. But if it doesn’t, and it actually falls in value, your portfolio could take a significant hit.

Here’s a good compromise: Consider selling some of your shares and keeping the rest. That way you do lock in some gains, perhaps even getting back as much or more than you initially invested in the stock. But you’ll still have many shares that can, ideally, keep growing. Shopify, which helps businesses around the world set up and run e-commerce stores, has surged in recent years, with the pandemic-driven growth in online shopping providing a tailwind. Many see a rosy future for Shopify, but view its stock as overvalued these days.