Portfolio heavy with employer’s company stock
October 23, 07 by StealthyI now own a total of 128 shares of my employer’s stock in my ESPP. I also own another 65 shares in my sharebuilder account. That makes a total of 193 shares.
I don’t need this many shares because it is making my portfolio WAY too heavy with the company. Over 50% of my portfolio is made up of the company. Shares are trading around $17-$18 per share. I plan on selling my 65 shares in my sharebuilder account when it reaches about $20.
Jon Says: 24.10.07 at 1:00 pm
How long have you owned them? If it’s less than a year, maybe you should hold off so they are counted as long-term capital gains.
Selling anything through Sharebuilder is painful with their huge real-time trading fees. Maybe you could instead diversify by adding money to other areas over time.
Stealthy Says: 24.10.07 at 7:33 pm
I’ve had the shares since maybe around June or July. I have a “special” from sharebuilder that all of my trades are only $7.95 until November 31st. I’m not too worried about the capital gains taxes with selling them since I won’t have too much of a gain. Maybe a difference of $20 more in taxes.
I’ve built a list of companies that I want to start investing in that pay dividends and build my holdings in them over my lifespan. I just need to get to the point where I start investing in them. I think I’m going to go with investing with zecco when I start doing this, but it won’t be until the beginning of ‘08
I’ve also learned that I need to keep more in cash and not put all of my money into stocks. I know most people read this and are gonna think “DUH!”
matt Says: 24.10.07 at 10:44 pm
What happens if your company’s stock doesn’t go to 20 for a long time?
I never set price targets. I only consider 2 things: taxes and the best place for my money to be.
Stealthy Says: 24.10.07 at 11:10 pm
If it doesn’t make it to 20 for a long time I’ll be getting about 3.5% dividend, but I’m pretty sure I’ll sell soon so that I won’t be so heavy in company stock. I’ll still be adding about $3k worth of company stock to my portfolio every year.
I’m still debating about paying $2k into my ESPP in a lump sum instead of go through payroll deductions. That’ll definitely make me heavy in the stock, but I’ll have $150 extra every month to put elsewhere. Benefit of paying lump is getting the match at the front end of the year while the price is still at the point it is at right now.
What would ya’ll do? lump sum or payroll deductions?
Jon Says: 26.10.07 at 9:15 am
I’m a big fan of dollar cost averaging, but it really depends on what you plan to do with the $2k if you don’t do the lump sum. My rough gauge is:
buy a big screen tv = invest the lump sum now!!
build your emergency fund = use payroll deductions
Not that you don’t deserve a new tv.
stealthy Says: 26.10.07 at 6:05 pm
I just got a new tv last year… for about $100, but I wouldn’t mind a nice big screen tv
More thank likely I would build my emergency fund up if I didn’t do the lump sum.