“I want to reduce the risk of owning so much of my family’s net worth tied up in one company.”
Some problems with owning too much of a single company:
We build a portfolio around the single-stock with other companies whose stock prices move differently. These investments have low correlation with each other, smoothing the investment experience.
Reduce the costs of taxes by selling equities that have losses. Re-invest the proceeds in another company. Before the end of the calendar year, offset the losses with taxable gains by selling the single-stock tax-free.
Financial plans for the family help address the right amount of risk and opportunity to keep in a portfolio. Follow our advanced financial planning process and align your CPA, attorney and other experts.
We search for and then monitor investments that move differently from each other and from your single stock. The lower the correlation, the more differently one investment moves from another. A negative correlation means that an investment may rise while another investment declines. This makes it possible for us to divest from your single stock position.
Discovery, understanding what means the most to you and your family. This includes your goals, values, relationships and more.
Understand and explain the risks of the single company.
Build a portfolio of low-correlation investments around the single stock.
Regularly looking for opportunities to harvest investments with losses to offset the taxable gains in the single stock.
Ongoing financial management. Track the investments, and take advantage of opportunities that may present themselves.
Dylan is a conservative midwestern family man. He grew up on a farm, but after graduating college, he went into the corporate world. Dylan then worked his whole life for the same large company. He retired several years ago but never sold his shares in company stock. He was unsure about the taxation, and unsure about the other risks he could face. Over the years, Dylan had attended numerous financial advisor seminars. He had read many things on the internet, in magazines and newspapers as well. Recently, Dylan was referred to us from another financial advisor who knew our expertise. We started out providing advice for his single stock portfolio, and how to unwind these positions with less taxes. Quickly, the conversation grew into a deeper conversation about the meaning of money.
Completed a discovery meeting
Gathered all of the information from all the various sources
Learned about the ownership of his shares, some of which were in his company’s retirement plan
Shared with Dylan several paths for him to choose from
Made it clear to Dylan the pros and cons of each path
And we educated him and his wife about advanced planning opportunities that he had heard about, but never completely understood
Dylan says “you guys are a lot of fun to work with and I really appreciate your camaraderie and knowledge.” Dylan chose a middle-of-the-road financial path that reduced his taxes but did not cause too much complexity. Plus, he has the opportunity to make gifts to charities and, someday, bequeath a family foundation. He says, “pretty good for a farm boy.”
Owning too much of your net worth in a single company can be dangerous for your long-term financial plans. To reduce your risk, we follow a 5 step process that begins with a discovery conversation. Then we analyze the single stock and make prudent decisions about the right amount of risk to take. Then we build a portfolio around that single stock of low correlation investments.
As time passes, some of these investments will experience short-term losses. We periodically harvest these losses and build up a reservoir of tax losses. Before the end of every tax year, we sell some of the single stock tax-free. And we provide ongoing financial management, looking for other opportunities, staying ahead of changes in tax law, providing advanced financial planning along the way.
Balance the risk and reward between investments to achieve your real-life financial goals.
We build high-quality, actively-managed equity portfolios using academically-proven techniques.
If you have a large amount of your net worth in the equity of a single company, learn how to reduce your risk, reduce your taxes, protect and grow your wealth.
Learn about how we manage incentive stock options and nonqualified stock options to help you grow and protect your wealth, reduce your taxes, and achieve your personal goals.
Learn how our team makes recommendations for the portfolio we call “Foundation Income.”
Learn how we carefully select some alternative investments to provide income and growth for some clients.
Learn how we perform investment performance analysis and provide our clients access to this information, on demand, with great technology.
Learn how we solve the complex problem of providing retirement income and reducing income taxes.
For some clients, an annuity may provide a safe and prudent retirement income. We have independent, expert annuity agents with a huge array of providers to choose from.
Learn how we provide retirement plan advice for our clients 401k accounts, and for employers who want to provide advice to their employees.
Our wealth management approach may be different from experiences you have had with other advisors.
We offer a broad array of events that broaden our knowledge and experiences.
Read this Periscope to learn what today’s politics might mean for our investments and also to get the short, (and long if you like), version of our investment and economic commentary.