Holding your RSU's/options

NVIDIA
JensBezos

Go to company page NVIDIA

JensBezos
Nov 3, 2021 39 Comments

Everyone keeps on saying that it's always the best to keep holding your RSU's/stock options as long as you can. Did you lose money following this strategy?

How to decide when you should sell your RSU's/stock options?

#investments #rsu #rsus #stockoptions #stock #stockmarket #stocks #stockpile

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TOP 39 Comments
  • Yelp
    zilowcrash

    Go to company page Yelp

    zilowcrash
    Depends on the company growth. Atleast try to hold it long enough to avoid higher taxes.
    Nov 3, 2021 7
  • Adobe
    fOdJ32

    Go to company page Adobe

    fOdJ32
    Look at Zillow. 25% will lose jobs and the stock ranked 30%+ holding too much of your employer’s stock is a lottery… many of the kids giving “advice” have never seen the market go down due to QE.

    RSUs have no tax advantage to holding for a year. It is all income when it vests (I believe). ESPP is different. Regardless you should never be holding more than x% of your NW in your employer. Those of us who have been around a while and amassed some money and work at companies that are a good investment can afford to keep RSUs longer.

    Litmus test: if I gave you cash of your RSU amount less tax now, would you rush out and put it all in your employer stock? If not, sell now
    Nov 3, 2021 6
    • The thing is — there’s no advantage at all to holding your own company’s stock after it vests. It’s just cash, tax-wise. You can decide to convert it into GOOG or NVDA or TSLA or whatever. Or a blend of several. I’ve worked at several FAANG companies and I just sell when it vests and then reallocate to stocks/funds of my own choosing.
      Nov 3, 2021
    • Adobe
      fOdJ32

      Go to company page Adobe

      fOdJ32
      Like I said the majority of you never saw things go down. When the market is going up, you look like a genius going long anything. Take ADBE… we are up 10x in 6 years… but did you have the information to guess that 6 years ago? No. Was it the best investment? No. Tesla and even dogecoin (created by Adobe employee) were better.

      Looking in hindsight is extremely dangerous. Investing a significant proportion of your net worth into one stock is high risk high reward. Like I said, if your NW is high in proportion to your RSUs and your risk tolerance is high it may be worth to keep it.

      Also, @yelp, don’t mean to pick on you but you are my point exactly on how little research people actually do before having an opinion… what is the standard RSU package in Netflix? How is their ESPP?
      Nov 3, 2021
  • Google
    rv482

    Go to company page Google

    rv482
    Don’t sell, get a SBLOC (Securities Backed Line of Credit), if you need liquidity. You get access to like 65% of your portfolio’s value at a 3-4% annual interest rate and don’t have any fixed payments. As your portfolio keeps growing you can access the liquidity without having to sell or pay capital gains tax. This is how I got my down payment money without having to sell anything. Minimum is 100k portfolio at Morgan Stanley.
    Nov 3, 2021 4
    • Google
      rv482

      Go to company page Google

      rv482
      Are you able to withdraw and spend portfolio margin on anything? The idea is to be able to spend on real estate or other investments outside of stocks
      Nov 4, 2021
    • Apple
      ivy jon

      Go to company page Apple

      ivy jon
      I can always withdraw from my brokerage account to reach a certain margin percentage (it's not as high as 70%, I have a 1.1MM portfolio in IBKR and it is letting me withdraw ~50% at like 1.something %). But I can get margin call if there's a market crash. Is it different with a SBLOC?
      Nov 4, 2021
  • VMware
    fhhih

    Go to company page VMware

    fhhih
    Diversify. Sell and reinvest. Don’t be greedy. Your salary ( and likely a bunch of unvested RSUs ) are still coming from your employer
    Nov 3, 2021 2
  • Google
    gjdkvkwlek

    Go to company page Google

    gjdkvkwlek
    I followed every rule in the book about investing and that’s why I am poorer than most people who didn’t read it. Diversification was such a bad strategy in last 20 years. HODL is king.
    Nov 3, 2021 2
    • Google
      googlyaf

      Go to company page Google

      googlyaf
      How many companies would you hodl?
      Nov 3, 2021
    • Google
      gjdkvkwlek

      Go to company page Google

      gjdkvkwlek
      HODL companies you know about and understand the business. I thought of buying AMZN in 2011 but didn’t because pundits told me to diversify. Same thing with TSLA and NVDIA in 2017. No more I will diversify if I know in depth what company is doing.
      I think it is safe to hodl 10 stocks you believe in.
      Nov 4, 2021