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Did you know
that well over 1 million Americans have a major and disproportionate
interest in just one stock? These individuals are employees and retirees of major
companies, founders or heirs, or simply long term accumulators of a
stock that has treated them well over the years. These individuals' financial well-being depends on a single stock holding,
and they bear a special financial risk, called "concentration" risk.
The purpose of the
Safe Haven
service is to help the concentrated shareholder understand and act on the various
strategies for managing this risk.
A stockholder
with a concentrated investment portfolio is like a sailor heading out with the family on a nice
day with no emergency equipment on board. If the sail is a short one in protected
waters, no harm may come, but for a long ocean voyage, the sensible
sailor will want to prepare. Preparation begins with understanding some
alternatives. What equipment the captain should have on board
depends on the weather and on many details of the intended voyage.
Expert consultation is definitely advisable.
Certainly, future
stock fluctuations are unknown, but many aspects of
the concentrated shareholder's future can and should be planned. Here
too, the expertise of a financial professional should be brought to bear.
With the support of Safe Haven, a professional advisor can consider
effectively with the client the many alternatives.
The various strategies for single-stock risk management
often are made to appear complicated, but there are really just two categories of solutions:
I. Strategies for Planned Selling
II. Strategies
for Long-Term Holding
Select any one of these five "strategies pages" to begin considering your or
your client's alternative strategies. If you are ready to consider
specifics for a particular stock, your next step is to request a
Research Report.
There is absolutely no
obligation.
The descriptions presented herein are introductory
in nature. There is much more to be learned about each strategy, and the
concentrated shareholder should confer with his or her financial and tax
advisors before making any decision on the appropriate choice. The
purpose of these introductory materials is not to offer or sell a
particular security or securities, but rather to educate concentrated
shareholders on the various opportunities for managing concentration
risk. |
