Is Getting Paid in Company Stock a Smart Move for Your Portfolio?

Saturday, 30 March 2024, 17:00

Many individuals are compensated with company stock in addition to cash salaries. While this can lead to potential growth, it can also pose risks such as lack of diversification and potential losses. Learn how to manage your stock compensation to maintain a balanced investment portfolio and minimize tax impacts.
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Is Getting Paid in Company Stock a Smart Move for Your Portfolio?

Risks and Rewards of Being Paid in Company Stock

Getting paid in stock isn't necessarily all beneficial. While it can lead to growth, it also poses risks. When paid in stock, it's important to consider the potential imbalances in your portfolio due to lack of diversification. Find out how to manage this risk to protect your investments.

Portfolio Balance and Risks

  • Imbalance Risk: Accumulating too much company stock can lead to portfolio imbalance.
  • Diversification: Lack of diversification may expose you to higher risks.
  • Mitigating Risks: Selling stock strategically can help maintain balance and minimize tax impacts.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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