Brian Dress, CFADirector of Research, Investment Advisor, Left Brain Wealth Management, LLC · Wealth Strategy for Corporate Executives & High-Net-Worth Investors | Concentrated Stock & Equity Compensation Planning | Director of Research | CFA | Left Brain Wealth Management

Is Too Much of Your Net Worth in One Stock?

30 Dec 2025 · 1 min

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1:20

In this interview, the host asks Nolan how executives should handle a large portion of their net worth tied to a single company’s stock. Nolan advises that if a single‑stock position reaches roughly 10% of total net worth, it warrants close scrutiny. He cautions against making stock transactions near year‑end without professional tax advice, as such moves can worsen the 2025 tax situation. He highlights the risk of indirect double exposure when an executive’s remaining portfolio includes index funds that also hold the same company, and recommends avoiding that. Nolan suggests hedging tools such as collars and adjusting the rest of the portfolio to reduce impact. For employees receiving substantial stock‑based compensation, especially during volatile periods, he urges selective handling of the shares. The segment concludes by promoting an “Executive Guide to Company Stock” that details these techniques.

If your net worth is tied to one company stock, watch this. Nolan, how do we guide executive clients in evaluating when to diversify a concentrated equity position?
That's tough. A general rule of thumb though, if it gets to over 10% of your net worth, then you definitely want to take a close look at it. There's a lot of things clients can do to hedge their position. I would be really careful about doing any transactions in company stock without talking to us or any other professional between now and year-end, just because of how close we are to the tax year ending, and you don't want to do anything that could make your tax situation for 2025 worse. But there are some things you can do to diversify. For example, you can take a look at the rest of your portfolio and make sure that you're not doubling up on the position. For example, if I'm an executive at NVIDIA and NVIDIA is already 10% of my net worth and my other 90% of stock exposure is through some index fund, then I'm silently picking up another 10% of NVIDIA exposure. So I certainly won't want to make that worse. And then there are other things clients can do or investors can do as well. They can do things like collar the position. If they're really, really worried about it. And then the rest of their portfolio, they can invest around the position. So hopefully it has a smaller impact if things don't go well.
And what's your advice, Nolan, for someone who's got heavy stock-based compensation when we run into times of volatility like we've had the last couple of weeks?
If you're an employee of Amazon, you certainly want to be careful with the amount of Amazon shares you have or any other publicly traded company. If you have a lot of them and if you're getting compensated in the shares, it's a little bit different than getting them as bonus. So I would be a little bit more selective.
So bottom line, Nolan, if your net worth is tied to one company's stock, make sure you download our Executive Guide to Company Stock, where we talk about some of the techniques that we use with our clients to manage equity exposure to one stock.