You’re staring at your portfolio summary, and the numbers are stark: 60% of your wealth sits in one stock. Maybe it’s company stock concentration from years of promotions, stock options that finally vested, or an inheritance position that’s grown beyond what you ever expected.
The question keeping you up at night isn’t whether the stock will go up or down next quarter. It’s bigger: “What happens to my retirement, my kids’ education, my financial security if I make the wrong choice now?”.
I work with executives facing exactly this situation. Here’s what I’ve learned about moving forward with confidence, even when the stakes feel especially high.
The Real Risk Isn’t What You Think
Most people facing concentrated stock decisions focus on market risk. Will the stock go up or down? But after working with clients through situations like yours, I can tell you the bigger risks are the ones you probably haven’t considered.
You’re One External Event Away from Everything Changing
Even excellent companies face forces completely outside their control. I watched clients at technology companies worry as semiconductor manufacturing became a national security issue, with new regulations written that had nothing to do with the company’s performance. Boeing clients learned how manufacturing issues can impact stock values regardless of the company’s aviation expertise.
The companies were still strong but external factors created volatility that no amount of company research could have predicted.
Your Income and Wealth Are Tied to the Same Place
If you work for the company whose stock you own, you have what I call double exposure. Your paycheck and your portfolio both depend on one organization’s success. When industry uncertainty hits, both your job security and your investments feel the pressure simultaneously.
I’ve seen how stressful this becomes for accomplished professionals who’ve built wealth responsibly, only to realize they’re more vulnerable than they thought.
A Different Decision Framework for Your Unique Situation
When clients come to me with these situations, we don’t start with investment theory. We start with a specific framework designed for people who need to make important decisions without perfect information.
Step 1: Define Your Non-Negotiable Outcomes
What absolutely must happen for you to feel financially secure? I walk clients through concrete scenarios: “If this stock lost 50% of its value tomorrow, could you still retire when you want? Could you still fund your children’s education?”.
We run the numbers. Real numbers, based on your actual goals and timeline. This isn’t about being pessimistic. It’s about understanding what you can afford to risk versus what you need to protect for your wealth protection strategy.
Step 2: Map Your Liquidity Timeline
Your short-term cash needs drive everything else. Are you buying a house in the next two years? Funding college tuition? Planning a career transition? These priorities matter more for timing decisions than what the market might do.
I often help clients create a liquidity map that shows exactly when they need access to cash, so we can plan around those dates rather than trying to time the market.
Step 3: Design Your Risk Reduction Strategy
Most successful approaches involve systematic changes rather than dramatic moves. We might establish specific price targets or percentage thresholds for gradual diversification. Some clients prefer calendar-based approaches, others like performance triggers.
The key is having a plan you can stick with regardless of whether the stock goes up or down next month.
Managing the Tax Impact of Your Decision
When you’re ready to diversify a significant stock holding, tax strategy may help reduce your burden significantly. This is where having multiple advisors collaborate becomes particularly valuable. We develop multi-year approaches that spread the tax impact across several years, coordinate with other life events, and take advantage of years when you might have lower income.
The total tax bill might not change dramatically, but strategic timing often makes payments more manageable and aligns with your cash flow needs.
Getting the Complete Picture for Your Decision
Complex financial situations benefit from multiple perspectives. When I work through concentrated positions with clients, I often collaborate with colleagues who have clients at similar companies. We share insights about what’s working, industry-specific trends, and regulatory changes that might affect your timeline.
This collaborative analysis is particularly valuable for tax planning around large positions. Having team members with thorough tax knowledge allows us to collaborate seamlessly with your tax professional. This partnership helps us coordinate timing strategies and break complex trade-offs into clear choices, ultimately leading to a more comprehensive and advantageous outcome for you.
What This Decision Really Comes Down To
Managing a large stock position isn’t ultimately about market predictions or perfect timing. It’s about making sure the financial risks you’re taking align with what you want to accomplish in your life.
The goal isn’t necessarily to eliminate all single stock risk. It’s to ensure that whatever risks you accept are intentional, well-understood, and fit appropriately within your broader approach to protecting and growing your wealth.
Most clients find that having a clear plan reduces their anxiety about the decision, even before they implement any changes. Knowing you have options and understanding the trade-offs often matters more than making the “perfect” choice.
Your Next Step When Time Matters
If you’re facing a concentrated stock decision with a timeline, having professional guidance that combines technical knowledge with understanding of your personal situation can make the difference between a confident choice and a rushed decision.
At Team Hewins, we offer a specific conversation designed for exactly this situation: our “Big Decision Clarity” session. This isn’t a sales meeting. It’s a planning session focused on your specific situation, timeline, and goals. We can help you understand your options clearly so you can make a confident decision, regardless of what the market does next.
Ready to move from uncertainty to clarity? Schedule your conversation while you still have time to plan strategically.
You can also learn more about how we help clients like you.
About the Author
Thuong Thien, CFP®, is a Senior Financial Advisor at Team Hewins with over eighteen years of experience in financial planning. As a Principal of Team Hewins, she focuses on helping busy, independent professionals achieve long-term financial security through comprehensive wealth management strategies. She specializes in working with corporate executives and attorneys, with specialized knowledge in equity compensation and executive compensation planning.
Team Hewins, LLC (“Team Hewins”) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training, and no inference to the contrary should be made. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas. Certain information provided herein is based on third-party sources, which information, although believed to be accurate, has not been independently verified by Team Hewins. Team Hewins assumes no liability for errors and omissions in the information contained herein.