Single Stock Diversification

Learn how we build an investment portfolio around your large equity position and help you diversify—not double-down (or worse) your risk.

“I want to reduce the risk of owning so much of my family’s net worth tied up in one company.”

Problems

Owning a large portion of your net worth in one company can be dangerous to your wealth.

Some problems with owning too much of a single company:

  • Too much risk and volatility
  • I need to keep my family’s financial situation secure in spite of what happens to my company
  • I don’t want to pay too much in taxes

Addressing the Obstacles

To single stock diversification

Diversify

learn more

Diversify

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.

Tax Harvest

mouse over

Tax Harvest

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 Plan

read more

Financial Planning

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.

Low Correlation

Helps you to divest from a single stock

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.

Correlation Matrix

Our 5-step Process

for single stock diversification

Discovery

Discovery, understanding what means the most to you and your family. This includes your goals, values, relationships and more.

Equity analysis

Understand and explain the risks of the single company.

Portfolio creation

Build a portfolio of low-correlation investments around the single stock.

Tax harvesting

Regularly looking for opportunities to harvest investments with losses to offset the taxable gains in the single stock.

Ongoing management

Ongoing financial management. Track the investments, and take advantage of opportunities that may present themselves. 

Client Stories

Pretty Good for a Farm Boy

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.

We:

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.”

Summary

of single stock diversification

How we begin

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

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.

Services We Provide

Investment Advice

Asset Allocation & Portfolio Management

Balance the risk and reward between investments to achieve your real-life financial goals.

Stock & Stock Fund Investments

We build high-quality, actively-managed equity portfolios using academically-proven techniques.

Stock and Stock Fund Investments
Concentrated Equity Owner Guy Espresso

Concentrated Equity Strategies

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.

Stock Option Planning

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.

Tax and Estate Planning

Bond & Fixed Income Investments

Learn how our team makes recommendations for the portfolio we call “Foundation Income.”

Hedging Strategies & Alternatives

Learn how we carefully select some alternative investments to provide income and growth for some clients.

Hedging Strategies
Investment Performance Analysis

Investment Performance Analysis

Learn how we perform investment performance analysis and provide our clients access to this information, on demand, with great technology.

IRAs: Roth, Rollover, Inherited and More

Learn how we solve the complex problem of providing retirement income and reducing income taxes.

Financial Planning
Annuity

Annuities of All Kinds

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.

401K Advice for Individuals and Businesses

Learn how we provide retirement plan advice for our clients 401k accounts, and for employers who want to provide advice to their employees.

401k Advice

Learn More

An initial conversation is always free of charge.

Talk with an Expert

Our wealth management approach may be different from experiences you have had with other advisors.

Contact Us

Attend an upcoming event

We offer a broad array of events that broaden our knowledge and experiences.

View All Events

Recent Blog Post

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.

Read More

Connect With Single Stock Diversification Advisor

Denver | Englewood | Greenwood Village | Littleton | Centennial