"Diversify your company stock! Remember Enron!"

Alarmist messaging doesn't work... worse, it sounds desperate. We need a new way to talk about managing concentrated stock positions.

Concentrated stock reading

• Tim Kochis: Managing Concentrated Stock Wealth

• AQR: Combining VPFs and Tax-Aware Strategies to Diversify Low-Basis Stock

• Tax Alpha Insider: De-risking concentrated stock by seeding an ETF in-kind

• Brooklyn: Underperformance of Concentrated Stock Positions

• Eaton Vance: Concentrated Stock Positions: Know The Risks

• BlackRock: CRUTs as Tools for Advanced Risk Management

How many people do you know who are sitting on a giant slug of some publicly-traded stock?

Maybe it’s you?

You know the risk is sub-optimal (in an efficient-frontier way), but you hold nonetheless.

An esteemed crew (ahem) meets next week to discuss single-stock wealth's risk, tax, and behavioral finance aspects.

Register for the event: https://alumcommunity.mit.edu/events/116377

Managing concentrated stock positions is the #1 thing advisers ask me about.

There are two challenges:
1) Behavioral stuff like reluctance to sell, hedge, gift, etc.
2) Comprehending/executing byzantine tax/risk strategies

And two rewards:
1) Solving a tricky problem for prospects/clients
2) Getting assets from unbilled to billed (sorry, it's true)

So many solutions

I keep a spreadsheet of solutions for de-risking concentrated stock positions.