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Managing Stock Compensation by Matthew McDaniel, Advisor

Would you ever invest 80% of your net worth in a single stock position? Likely not–especially when your stability in retirement is on the line.

You may be surprised to know that we’ve met clients who have come to us with this exact portfolio problem, but they didn’t know it. How does this happen? Usually, it’s the result of accumulated employer stock compensation.

If you have enjoyed stock compensation for many years from the same employer, you can find yourself with an undiversified portfolio without realizing it.

In this week’s discussion, advisor Matthew McDaniel breaks down important questions like:

  • How to keep your portfolio diversified when employer equity is involved
  • Key tax pitfalls of diversifying too quickly
  • The key impact on households less than 10 years from retirement


America’s Top Companies by Revenue: A lot has changed in how business works in the last 20+ years. Below is a visualization of the top U.S. companies by revenue in both 1994 and 2023. The 1994 numbers were not adjusted for inflation:

Based on this data, we can see that today’s top 10 list looks very different from what it used to. The inflation rate from 1994 to 2023 is approximately 105.6%. Even after accounting for inflation, the biggest companies of 1994 are still far behind when it comes to revenue.

Business Briefing: 

  • The Economy and Chocolate: Unfortunately, cocoa prices have tripled over the past six months, driven by extreme weather in West Africa, crop disease, and, yes, panic purchasing.
  • The Labor Market: We continue to see positive signs in the labor market. The labor market began softening after the Fed started raising rates in March 2022. This changed after the Fed pivoted. It is a promising outlook for the March labor report, as well. Since December 2023, households have indicated that it is easier to find a job.

Solar Eclipse Record: After witnessing his first solar eclipse in 1963, Laverne Biser was hooked and has since traveled the world to experience twelve more. “You see one, you want to see them all,” Biser told CBS Texas. “They are so pretty.” The 105-year-old does not have to go far for his 13th eclipse; he lives in Ft. Worth and will see it from his backyard. The astronomy enthusiast takes photos of each eclipse; his favorite was captured in Williston, South Dakota 1979.