Love, your Money - Wealth, Money, and Financial Advisor for Women 277: Should You Diversify Your Employer Stock? Here’s the Data… And a Plan
Welcome back, Money Lover! In today’s episode, we’re tackling a financial risk I see far too often: holding too much of your employer’s stock.
If you’ve built up a significant position in company shares through stock options, RSUs, or other equity compensation, this conversation is for you.
Many people assume that because they work for a successful company—especially one of the Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Tesla, Meta)—their employer stock is a safe and smart investment. But when it comes to investing, diversification is key.
Today, we’re breaking down the risks of concentrated stock positions, and talk about why even the biggest companies rarely stay on top forever. Then we’ll get into how diversification helps protect and grow your wealth, and wrap up by sharing smart, strategic, and tax-efficient ways to sell your employer stock.
It’s easy to feel attached to your company’s stock—after all, you’ve invested your time and energy in its success. But holding too much employer stock exposes you to unnecessary financial risk, and today’s episode is all about how to minimize that risk while maximizing your long-term returns.
The key takeaway? You don’t need to time the market perfectly—you just need a plan. (We can help with that.)
Here’s what you’ll learn in this week’s episode of Love, your Money®:
- 01:16 An intro to the financial risk we see far too often, and who this episode is perfect for
- 02:42 The illusion of safety in holding onto concentrated employer stock
- 05:34 The past performance of top 10 stocks, risks associated with not diversifying–and, why most people still want to hold on to their company stock
- 07:31 How your own biases can sabotage your wealth building efforts, and a unique reframe to approach your decision with
- 08:59 Understanding your equity and the kind of stock you own
- 10:58 Developing a tax-smart strategy for diversifying your investment portfolio
- 14:05 The four-step process we use to structure client investment portfolios
- 16:02 The tax implications of selling your employer stock, and, more importantly, how to minimize those taxes and keep more of your hard-earned money
- 17:57 The new-to-market strategy we’re helping clients with large unrealized gains utilize: Ultra Tax Efficient Wealth Management℠
Show Notes
To get access to the full show notes, including all the resources mentioned, visit: https://hendershottwealth.com/podcast/diversify-your-employer-stock/
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Hendershott Wealth Management, LLC and Love, your Money do not make specific investment recommendations on Love, your Money or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.