§ 01
| Approach to vested RSUs | The case for it |
|---|---|
| Sell at vest, reinvest in index funds | Diversifies away single-company risk; you would not buy this much of one stock with cash |
| Hold the shares | Belief in the upside -- but you are already over-exposed through your job |
| Use a 10b5-1 plan | A pre-set automatic selling schedule that avoids insider-trading concerns and emotion |
§ 02
The clarifying question: if your employer handed you the cash value of your vested RSUs, would you turn around and buy that many shares of your own company? For almost everyone the answer is no -- which makes selling at vest and diversifying the rational default. A 10b5-1 plan automates that so you are not timing or second-guessing.
§ 03
If you hold vested company stock worth more than ~10% of your investable assets, consider selling down to a comfortable level and reinvesting in a diversified fund -- ideally via an automatic 10b5-1 schedule.
§ 04
§ 05
Your vested RSUs have grown to 40% of your investable net worth, on top of your salary from the same company. What does prudent risk management suggest?
Five questions · AI feedback
Sit with the ideas.
Why is a large position in your own employer's stock an especially risky form of concentration?
Why: