Glossary
What is a concentrated stock position?
A concentrated stock position is a single holding large enough that its performance materially affects your whole financial picture — commonly more than 10% to 20% of investable assets. It usually accumulates through equity grants, purchase plans, or an acquisition rather than through a deliberate decision.
The risk is not that the company is bad. It is that a single company has a much wider range of possible long-term outcomes than a diversified portfolio, including permanent loss, and no amount of familiarity with your employer changes that.
For employees the exposure is doubled: the same company pays your salary. A bad year can arrive as a smaller bonus, a layoff, and a portfolio drawdown at the same time.
Unwinding it is usually a sequence rather than a single move — staged across tax years, timed around your bracket, and coordinated with harvested losses and charitable giving.
Related terms
Tax-loss harvesting
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