Q: What’s the 7% rule in stocks?

— T.L., Anchorage, Alaska

A: It’s a rule addressing when to sell; it says you should sell out of a stock if it dips by 7% or so below your purchase price. So if you bought shares of Old MacDonald Farms (ticker: EIEIO) at $100, and they dropped to $93, you’d sell all of them. This can happen automatically if you set a “stop-loss” order with your brokerage.

The benefit of this rule is that it can minimize your losses. If, for example, a stock begins a 30% decline — which has happened even with shares of great stocks — you’d be out of it before your investment lost any more value. Of course, no one knows exactly when a stock will go up or down, so if that stock pulled back a little before immediately beginning a big climb, you might end up missing out on much of that.

It can be good (and easier) just to hang on to shares of great companies through ups and downs, aiming to hold for many years.

Q: I’ve saved a bit of money and want to buy some stocks. What do I do first?

— O.A., Broken Arrow, Oklahoma

A: Before investing, pay off any high-interest-rate debt and have an emergency fund that can pay at least several months’ worth of living expenses. Read and learn more about investing, too, perhaps with John C. Bogle’s “The Little Book of Common Sense Investing,” “The Only Investment Guide You’ll Ever Need: Revised Edition” by Andrew Tobias, or Joel Greenblatt’s “The Little Book That Still Beats the Market.” Read up on brokerages at Fool.com/money.

How your money is invested should change over time. When you’re young, with decades ahead of you, parking most or all of your long-term dollars in stocks can maximize your portfolio’s growth potential — and you’ll have plenty of time to ride out market downturns. But as you approach and enter retirement, you may want to move some money into less volatile investments, such as bonds, certificates of deposit (CDs) and money market accounts.

Don’t overdo it, though. Consider this: If you retire at age 65 and live until age 90, as many people will, that’s a 25-year-long retirement. It might be a good idea for much of your portfolio at age 65 and even 75 to be deployed into stocks — perhaps via a simple, low-fee S&P 500 index fund.

The stock market has delivered better growth rates (roughly 10% annually) than bonds and other investments over most long periods. So consider aiming for growth by keeping a portion of your portfolio in stocks, while aiming to preserve your assets with a portion parked somewhere safer.

How should you divide your assets? An old rule of thumb was to take the number 100, subtract your age, and invest the remaining portion in stocks. So if you’re 65, you’d put 35% of your portfolio into stocks, and 65% into bonds. With people living longer these days, a newer guideline suggests subtracting your age from 110. That would put a 65-year-old’s money 45% in stocks and 55% in bonds.

But there’s no one-size-fits-all strategy for how best to allocate your assets. Much will depend on your (and your spouse’s) savings, incomes, risk tolerances, ages and expected longevity, among other things. Try to determine the allocation mix that will best allow you to sleep well at night, while still generating the income and portfolio growth required for the rest of your life — and maybe leave something for your heirs. Perhaps consult a financial planner, too; you can find some fee-only ones at NAPFA.org or GarrettPlanningNetwork.com.

One of my most regrettable investing moves was believing the reports that cannabis stocks were a good investment due to the legalization of medical marijuana. Not only did the stock I invest in plummet, but it also did a reverse split — and then my brokerage charged me a $37 “reorganization” fee for a stock that had already tanked. I didn’t know that was going to happen, or I’d have sold it before it happened. So I guess that was the worst mistake I made, but thankfully the loss wasn’t more than $100.

— G.T., online

The Fool responds: You’re fortunate to have lost only $100! Investing in a burgeoning industry can be a profitable move, but it doesn’t always work out. It’s important to remember that when an industry is still young, it can be hard or impossible to know which companies will end up being big winners and which ones will flame out. You might do well to spread your dollars across a bunch of companies, or perhaps better still, to wait until it’s clearer which ones are best positioned for long-term success. It’s often better to invest in companies that have proven profitability, and that have more cash than debt. And

when choosing between brokerages, check their fee schedules and favor those with low fees.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@fool.com.)

I trace my roots back to 1960, when two brothers bought a pizza joint in Ypsilanti, Michigan. One soon bought out the other, and within a few years he was franchising me. By 1989, I boasted 5,000 locations worldwide. I added breadsticks in 1992, sandwiches in 2008 and penne pasta in 2009. With a recent market value topping $15 billion, I’m the world’s largest company delivering a certain item. Bain Capital bought most of me in 1998 and took me public in 2004. I’ve franchised more than 21,000 stores around the world, and I rake in more than $19 billion annually. Who am I?

Last week’s trivia answer

I trace my roots back to 1978, when four people began designing semiconductors in a dental office’s basement in Boise, Idaho. My first contract was for a 64K memory chip. I launched a production facility in 1980 and debuted the world’s smallest 256K DRAM chip in 1984. I bought Texas Instruments’ memory business in 1998 and became one of the world’s largest memory-chip makers. With a recent market value topping $140 billion, I claim to be “the only company manufacturing today’s major memory and storage technologies: DRAM, NAND and NOR technology.” I have more than 50,000 patents. Who am I? (Answer: Micron Technology)

Nvidia is one of the world’s largest semiconductor companies. It once generated most of its revenue from gaming-focused graphics processing units (GPUs), which can also be used to mine certain cryptocurrencies. But now 89% comes from data center GPUs, which are especially well-suited for processing complex AI tasks.

Nvidia’s sales of data center GPUs surged in 2023 (fiscal 2024) after OpenAI’s launch of ChatGPT in late 2022 sparked a global artificial intelligence (AI) infrastructure race. That year Nvidia controlled about 98% of the data center GPU market. From fiscal 2025 to fiscal 2028, analysts expect the company’s revenue and earnings per share to expand at compound annual growth rates of more than 30% and 28%, respectively, as the AI market continues to expand.

But those estimates could be too conservative — since Nvidia has comfortably beat Wall Street’s top- and bottom-line expectations for many quarters. Because it’s the top seller of the picks and shovels for the AI gold rush, its revenue and profits may keep crushing analysts’ expectations.

Nvidia’s sales in China were recently throttled by U.S. export curbs, but it can easily offset that pressure with its stronger chip sales in other markets. Simply put, Nvidia has plenty of ways to keep growing. (The Motley Fool owns shares of and recommends Nvidia.)