While it's generally true that concentrated stock positions in a portfolio carry higher risks relative to potential long-term rewards, at Wealthstone, we recognize that each case has its nuances. Our approach involves a detailed analysis of the specific risks associated with your concentrated position, including company-specific, sector, economic, political, and management risks. We then conduct a thorough review of your overall wealth to advise on diversification strategies. Our goal is to ensure that any diversification aligns with your return objectives while being cost-effective and tax-efficient. This tailored strategy is fundamental to managing and mitigating the inherent risks of concentrated stock positions.

We understand that clients often hesitate to reduce concentrated stock positions due to concerns about significant tax liabilities. Our expertise includes employing advanced selling strategies to mitigate and spread tax impacts. We utilize alternative investment vehicles such as Exchange Funds, which allow for the exchange of concentrated stock for a diversified basket of securities without immediately triggering capital gains taxes. Additionally, our strategies encompass direct indexing, covered call strategies, and time-based selling which seek to optimize after-tax returns. These methods are integral to our approach in managing concentrated positions effectively and efficiently.

We offer a strategic approach to managing your concentrated stock position, which we hold in a Charles Schwab brokerage account, free of any fees. Throughout the year, we’ll recommend a range of investment strategies aimed at diversifying your portfolio, always with a keen eye on minimizing taxes and costs. When the time is right, we'll collaboratively decide on transferring a portion of your concentrated stock to a managed account. This move allows us to further diversify your holdings and apply our specialized tax-efficient strategies. It's important to note that only the shares transitioned into the managed account will incur our full-service wealth management fees, ensuring transparency and alignment with your financial objectives.

Throughout the year, we’ll keep you abreast of the latest research and insights regarding your concentrated stock position. We’ll diligently provide you with tailored recommendations and strategies for managing your shares, encompassing short, medium, and long-term perspectives. Our commitment is to ensure you are well-informed about the developments and trends affecting your concentrated stock, empowering you to make decisions that are aligned with your financial goals and informed by expert analysis.