Concentrated Stock

Concentrated Stock

by Richard C. Wilson & Family Offices Group Association Team

Family Office Definition: Concentrated Stock

Concentrated Stock definition:  A concentrated stock position is when one equity holding becomes dominant and disproportionate percentage of an individual or family’s portfolio.  The stock may have become concentrated due to being part of compensation from an employer or family business, being purchased at a low cost basis and appreciating over decades, or being held for emotional reasons.  The individual or family’s wealth is highly dependent on the performance of an individual stock.  Solutions for concentrated stock positions include calendar-based selling intervals (i.e. a number of shares every quarter), price-based selling (i.e. a number of shares in stop orders), exchange funds, charitable giving or trust strategies.

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