Many corporate and tech employees accumulate a great deal of employer stock via Restricted Stock Units (RSU), Incentive Stock Options (ISO), Non-Qualified Stock Options (NSO) and Employer Stock Purchase Plans (ESPP). Unfortunately, not many of us learned how to manage concentrated stock positions in school and there are a great deal of conflicting emotions at play and behavioral pitfalls to avoid.
In this episode of Coffee, Sweaters, and Finance!, Morgan Ranstrom, CFA, CFP®, a financial planner at Trailhead Planners and Bill Mulvahill, CFP®, CPA, a financial planner at Essential Wealth, discuss the emotional perils of owning company stock, the behavioral biases at play with concentrated stock positions, and some strategies for overcoming them.
Some questions and topics that come up:
- What are the emotional challenges of dealing with a concentrated stock position?
- The mistakes to avoid when concentrated stock makes up the predominant portion of your net worth.
- What behavioral biases do we often see when individuals own company stock?
- What's the number one strategy for overcoming your emotions and productively managing your company stock position?
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