11 Apr Diversification Strategies for Corporate Executives with Concentrated Stock
Here are some strategies to consider:
- Portfolio Rebalancing – Rebalancing your portfolio involves selling over-weighted investments and buying under-weighted ones to restore your portfolio’s balance. This can help you maintain a diversified portfolio and reduce your exposure to any one asset.
- Selling Vested Equity Positions – If you have significant equity positions vested, it may be wise to consider selling some of the shares and diversifying your portfolio. This can help reduce the risk of your portfolio being too heavily concentrated in one stock.
- Tax-Efficient Strategies – When selling equity positions, it’s essential to consider the tax implications of the sale. A financial planner can help you develop tax-efficient strategies that can minimize the tax impact of selling your equity positions.
- Hedging Strategies – Hedging is a strategy that involves taking a position in a financial instrument that is inversely correlated with your concentrated stock position. This can help mitigate the risk of your concentrated stock position without selling it outright.
Concentrated stock can be a double-edged sword, providing potential financial gains, but also exposing you to significant risks. At Centurion Wealth, we help clients build a comprehensive financial plan. Your plan will include diversification and risk management strategies that help you achieve your financial goals while minimizing the risks associated with your concentrated stock position.