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Concentrated positions are a bittersweet proposition. Often, they have been the source of great financial benefits. Over time as the concentration grows there are real risks that develop and tend to increase overall investment risk in your portfolio. There are ways to address this risk. There is a layer of complication to them and each of the options we are explaining are quite different from each other and may not relate to your case at all if you have concentrated wealth. However, one of them might. You may have a desire to hold the position to avoid a large tax bill and want to reduce downside risk (equity collar). Or you may be charitably inclined and you could do outright gifting of shares and or a more robust possibility is a Donor Advised Fund. Lastly, you could just do an outright sale. Any one or all of these could be a possibility for you. If you have a concentrated position and want to talk about it, then feel free to give me a call.

Concentrated Positions