Do you have a highly concentrated position in a stock, mutual fund or exchange-traded fund (ETF)? Do you have a plan in place to reduce the risk and manage this position in a tax-efficient manner?
In a recent episode of the Science of Economic Freedom, we covered the pros and cons associated with a highly concentrated position, or HCP. And while an HCP can help you build wealth, it can also represent both a threat and a challenge to your financial goals.
In this episode of the Science of Economic Freedom, “Unwinding A Highly Concentrated Position in Equities,” we discuss the tactics and strategies needed to extricate yourself from a highly concentrated equity position so that you can add greater diversity to your holdings while also making sure you don’t sustain a massive tax hit in the process.
Topics covered in this episode include:
The reasons why investors are reluctant to sell down an HCP.
Why an HCP is good for asset accumulation, but not for asset protection.
How to implement “taxable gain harvesting.”
When to consider “gifting” shares to a family member.
Options strategies for managing HCPs.
Using an “exchange fund” to manage an HCP.
Key questions to ask before you unwind a highly concentrated position.
Discover your opportunities to grow wealth. It takes an expert Wealth Coach who is also a financial professional to bring clarity to your goals and help you establish a clear pathway to making sound financial decisions.