Let’s dive into something I’ve seen too many times: the emotional pitfalls of holding on to concentrated stock positions for too long.
Holding on to Your RSUs for Too Long? A Cautionary Tale
Let’s talk about a common scenario: holding on to too much company stock and the emotional rollercoaster that often comes with it.
I’ve seen it happen many times. People build up a lot of stock from their company and think, “I’ll just hold on—it’s doing great.” But here’s the question: Are you betting too much on one company?
The Story of John
John was a do-it-yourself investor I met years ago. He had over $4 million in stock from a biotech company where he’d worked for most of his career. At the time, John was in his mid-50s and just a few years from wanting to retire.
After several conversations, I suggested he start thinking about diversifying his holdings. His stock made up a huge part of his net worth, and there were risks to holding it all in one place.
Then the company announced a merger, and the stock price shot up. John decided to hold on, hoping for an extra $50K to $100K in gains. I asked him, “What’s the risk?” He was confident everything would go through smoothly.
It didn’t. The deal fell apart, the stock plummeted, and his $4 million position took a serious hit. When I reconnected with him 10 years later, John was still working—well into his sixties—because that decision delayed his retirement by a decade.
What’s the Risk in Your Portfolio?
If you have a large concentrated stock position—or RSUs that make up a big part of your wealth—now is the time to ask yourself:
• Is this stock supporting my long-term goals, or am I taking unnecessary risks?
• What’s my strategy for managing it?
— Mateo