The Day I Became "The NVIDIA Guy"

 "Holy shi*," I whispered, staring at my portfolio. The $180,000 bet I'd made on NVIDIA stock at the end of 2022 was about to become $900,000.

Then The Wall Street Journal got in touch.

They were going to write about my NVIDIA investment. Me – someone who has spent years preaching the gospel of passive index investing, warning about the dangers of emotional attachment to individual stocks.

The irony wasn't lost on me.

As I hung up the phone, a strange anxiety crept in. If I sold now (which my rational side would suggest), would I be a fraud? How could I be "The NVIDIA Guy" if I was secretly planning my exit?

And that's when it hit me: I had fallen into the exact emotional trap I so often warn others about – getting too attached to an investment.

This moment of self-awareness forced me to confront an uncomfortable truth about investing that most people never grasp: Your emotions aren't just one factor in your investment returns.

They're everything.

The Two-Million Dollar Emotion Gap

Here's the number that keeps me up at night: In a DALBAR study, over three decades, from 1984-2013, while the S&P 500 returned 11.11% annually, the average investor earned just… 3.69%.

That gap – that emotion-driven 7.42% difference – meant a $100,000 investment grew to $2,358,275 for disciplined investors, but only $296,556 for everyone else.

Two million dollars. Lost to emotion.

Funny how we'll spend five hours optimizing our portfolio allocations but won't spend five minutes examining our own emotional triggers around money.

A Dangerous Idea Worth Considering

What if – for a small portion of your portfolio – emotional attachment could actually be useful?

Not for your whole portfolio. God, no. But maybe for a small, carefully contained portion (let's say 20%), having an emotional stake in specific companies might help you avoid the worst investing sin of all: panic selling during crashes.

The Rules of Emotional Investing

If (and only if) you can check these boxes:

• You openly admit you get emotionally attached to certain stocks

• You're willing to limit this to <20% of your portfolio

• You understand this might hurt your returns vs. a theoretical perfect portfolio

Then maybe, just maybe, this unorthodox approach is worth exploring.

The Bottom Line

I still believe in index investing. It's absolutely the smartest path for most people most of the time.

But after my NVIDIA experience, I've learned something important: Sometimes understanding and working with your emotional tendencies is better than pretending they don't exist.

Just keep it to 20%.

And for everyone else? Buy those index funds, automate your investments, and never look back. Your future self will thank you.

Remember: The market doesn't know you own index funds or individual stocks. But you do. And in the darkest market moments, that psychological difference might be what keeps you in the game.