Diversifying Employer Stock Gifts or RSU’s

If you are the lucky recipient from your Employer (ER) who is using Restricted Stock Units (RSU’s) or other types of stock grants, (ISO’s, NSO’s, SAR’s ESPP’s) to lure you into furthering your longevity, this is a wonderful thing. Congratulations! Seriously - this is awesome. Unless you worked for Webvan back in 1998 and then lost it all, or Enron in 2001, and yep - same same. If you are too young to remember these companies, I will help:

https://www.begintoinvest.com/enron-stock-chart/

https://streetfins.com/webvan-the-dotcom-bubbles-biggest-bust/

So these gifts or options to purchase can build your wealth very quickly and consistently. However, diversifying this position is of crucial importance to the safety of this wealth you are building. Enron was a fortune 500 company, and Webvan was a dot come darling start up. No company is guaranteed not to fail or get overtaken by competitors.

You may work for a company that we all have more faith in, like Apple, Microsoft, Nvidia or Tesla- to name a few of the stocks almost everyone owns that have done wonders for their portfolio. As wonderful as your ER stock may be, having too much of any one company is incredibly risky. If a Webvan or Enron situation occurs, your wealth is toast, usually within a few months.

We can open a cash brokerage account to receive periodic transfers of your newly purchased or inherited stock, and begin to diversify this large position out slowly over the years ahead to build a more wide reaching stock and securities portfolio. I can work in tandem with your CPA to create the best strategy to keep you within comfortable and known tax brackets and limits on the gain we will create.

Diversification does not guarantee or profit or protect against loss.