Exiting a Winning Position – Strategies for Gains on Single-Company Stock
When your employer’s stock accounts for a large portion of your net worth, there are reasons to consider taking some gains. Emotionally, most people struggle to effectively exit a winning position, but doing so is extremely important for capturing reasonable upside while mitigating downside risk.
There are many reasons why a single company’s stock price can drop precipitously, even for respected and successful firms. In the unlikely case this would happen to your favorite stock or employer, do you want to potentially sacrifice your successful retirement by hanging on to every share you’ve purchased or earned? We often remind people that when their favorite company’s stock appreciates, it’s likely many others will, too. Further, a single stock’s price fluctuates much more significantly than does a diversified portfolio that includes many industries.