How Do Advisors Deal With Concentrated Stock Positions? [Episode 93]

What do you do if a client puts almost their entire net worth in one stock? Today Matt and Micah answer a question from an advisor who is dealing with this very situation. Listen in as the guys discuss the importance of how you set expectations with your clients and what you need to do in order to navigate more complex situations.

You’ll hear Matt and Micah put things in perspective by looking at the client’s specific circumstances and determining the dependence and cash flow factors that are at play when someone owns a lot of one stock. They also share new insight on some really great option strategies and tactics to help you stick to your guns while ensuring your clients receive massive value from you and benefit from their portfolio.

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What You’ll Learn In Today’s Episode:

  • The importance of recognizing your deal breakers and setting expectations on day 1.
  • Examples of deal breakers when working with clients.
  • The difference between greed and a solid investment plan.
  • The important things you need to know that might dictate how much they can have in stock.
  • What catastrophic risk is and how to avoid it.
  • The importance of empathizing with the client’s situation.
  • How to walk a client through making the best decisions for them.
  • The right questions to ask when evaluating a client’s concentrated stock.

Ideas Worth Sharing:

In this business, if you're good, you’re right 6 out of 10 times. You’re never going to be right 9 out of 10. – Peter Lynch Click To Tweet A client who has 100% in one stock – I don’t care what that stock is – that’s a financially catastrophic risk. You’re betting everything, your entire family’s future, on one position. - @ThePerfectRIA Click To Tweet When do people sell at the bottom? When it’s fear. When do people buy at the top? When it’s greed. - @ThePerfectRIA Click To Tweet

Resources In Today’s Episode:

Micah’s Birthday gift to Matt

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