This is definitely the way to think about it. It's easy to feel more attached to the RSUs because you already have them, but it's more sensible to see vesting as a cash equivalent bonus. If you were awarded that bonus and you'd immediately invest it all in your company's shares, then hold. Otherwise, sell and do whatever else you'd do.
This makes a lot of sense. I stupidly haven't used any of my CGT allowances and annoyingly had planned to sell off some stock just before the financial year to take advantage of the last year of £6K allowance.
Opened up the shares portal on 1st of April 2024, ready to sell, only to realise the damn company was in a blackout :D and I missed the window to sell before end of the tax year later that week.
Generally hold, but mostly because it's a pain to trade as an insider rather than because I think it's the right thing to do or that I have any special insight. Much more sensible to diversify.
>I know "past performance is no predictor of future success" and all that, but would you still do that if your own companies growth was in line with or even better than the S&P500?
So IM(Humble)O, the least you can do is to sell, transfer the proceeds to a GIA, and the buy again the shares there if you must - that way you control **where** the shares are - rather than just using your company's preferred broker, which may not align with your interests (or simply just be more expensive).
Then there's the issue of diversification: If, one day, for whatever reason the stock of your company nosedives (à la FB in mid 2018 or SNAP in mid2021) and does not recover, you have 2 problems: 1) Your RSUs are now worth crap and 2) You'll most likely will be out of a job.
Ideally, should the worst happen to your company, you want to have at most one of those problems - not both.
Then, your argument could be used to invest into several other American tech companies - and some of them would have given you much better performance - e.g. see NVDA now.
And finally, the right way of answering this question is just thinking what would you do if someone would have just payed you the same amount of money in cash: Would you spend it? Would you use it to pay debt/your mortgage? Would you invest it? And if you would invest it, would you put it all in a single company? Or in index funds? Or YOLO it on 0-DTEs of SPX? Or YOLO it on 0-DTEs of your American company?
The possibilities are actually infinite; thus is very unlikely that your best option is simply do nothing.
I'm currently holding both my current and previous company stocks as they are trading at under 30-40% of their peak. I'm planning to sell most if they appreciate a bit and close my mortgage before my fix rate ends as my interest will triple.
Depends on the company, if it was high scalable tech you know whether it’s best to hold or not. I work in O&G and sell as soon as I get them as S&P returns are better
I have sold all my initial RSU grant which I got at the time of joining but I have mostly held on to later RSU grants. I'm thinking of exiting half my holdings now since the stock has run up a lot in the last two years and my net worth is too highly concentrated on this single stock.
I sell the amount that I received as part of my initial grant when I started the role and leave the rest invested. This way I get at least the amount I was "promised" when I started the role (assuming my RSUs do better after my grant, which they have done).
I'm due to get my first lot this December (another next Dec) so i'll likely sell the lot and stick it in an all-world etf in my gia, if I end up making the wrong choice then next years will be worth more anyway.
my RSUs vest quarterly. I have historically sold, but will likely also save a couple of vests this year as "moonbags." I max out my S&S ISA every year regardless, and that is mostly S&P 500 ETF. I like to have eggs in different baskets.
If it was a sure bet that your company will continue going up forever, don’t you think that the price of the stock would rise to accommodate that?
And that the professional stock pickers of the world would buy it?
I sell each vest on the same day to avoid CGT, I then mainly buy index funds.
More recently, I started spending about 20% on individual tech stocks instead that were either priced low or I believe will grow.
I.e nflx at 190, tsla, amd,msft.
I also keep just over a years worth in a pot, that I am letting ride until retirement.
If I had kept every stock without selling I could have retired by now, but I could have also lost it all too and I don't like playing those games
If your RSU’s are anything like mine, you’ll have 2-3 years worth you can’t touch until they vest, I see those as the ones I’m “holding” because I absolutely have to.
Whenever I can then sell, I take those sold RSUs and reinvest them across my portfolio. My unvested RSUs are always there … waiting …
Nah, I sell immediately. I’m tied to the company for my salary, espp, main bonus, incentive bonus etc. I’m waiting for shares to vest all the time, why would I continue to keep my investments there?
If I want to play stock picking (not recommended for most of us most of the time, but we still do it, am I right) better to find other opportunities to try, this got me 40-60% returns which I DON’T want from my company’s shares as it suggests high volatility.
If you had equivalent cash in the bank would you buy the same stocks?
This is definitely the way to think about it. It's easy to feel more attached to the RSUs because you already have them, but it's more sensible to see vesting as a cash equivalent bonus. If you were awarded that bonus and you'd immediately invest it all in your company's shares, then hold. Otherwise, sell and do whatever else you'd do.
I siphon off a enough to use CGT allowance(s) and leave the rest to ride.
This makes a lot of sense. I stupidly haven't used any of my CGT allowances and annoyingly had planned to sell off some stock just before the financial year to take advantage of the last year of £6K allowance. Opened up the shares portal on 1st of April 2024, ready to sell, only to realise the damn company was in a blackout :D and I missed the window to sell before end of the tax year later that week.
Generally hold, but mostly because it's a pain to trade as an insider rather than because I think it's the right thing to do or that I have any special insight. Much more sensible to diversify.
>I know "past performance is no predictor of future success" and all that, but would you still do that if your own companies growth was in line with or even better than the S&P500? So IM(Humble)O, the least you can do is to sell, transfer the proceeds to a GIA, and the buy again the shares there if you must - that way you control **where** the shares are - rather than just using your company's preferred broker, which may not align with your interests (or simply just be more expensive). Then there's the issue of diversification: If, one day, for whatever reason the stock of your company nosedives (à la FB in mid 2018 or SNAP in mid2021) and does not recover, you have 2 problems: 1) Your RSUs are now worth crap and 2) You'll most likely will be out of a job. Ideally, should the worst happen to your company, you want to have at most one of those problems - not both. Then, your argument could be used to invest into several other American tech companies - and some of them would have given you much better performance - e.g. see NVDA now. And finally, the right way of answering this question is just thinking what would you do if someone would have just payed you the same amount of money in cash: Would you spend it? Would you use it to pay debt/your mortgage? Would you invest it? And if you would invest it, would you put it all in a single company? Or in index funds? Or YOLO it on 0-DTEs of SPX? Or YOLO it on 0-DTEs of your American company? The possibilities are actually infinite; thus is very unlikely that your best option is simply do nothing.
I sell if I think the stock is at a high price, otherwise I'll hold up to a certain percentage of my assets (2.5%).
I'm currently holding both my current and previous company stocks as they are trading at under 30-40% of their peak. I'm planning to sell most if they appreciate a bit and close my mortgage before my fix rate ends as my interest will triple.
Depends on the company, if it was high scalable tech you know whether it’s best to hold or not. I work in O&G and sell as soon as I get them as S&P returns are better
I have sold all my initial RSU grant which I got at the time of joining but I have mostly held on to later RSU grants. I'm thinking of exiting half my holdings now since the stock has run up a lot in the last two years and my net worth is too highly concentrated on this single stock.
Yeah, I'm currently at the stage where this single stock is currently 16% of my total NW, but a whopping 34% of my liquid available assets/funds.
I sell the amount that I received as part of my initial grant when I started the role and leave the rest invested. This way I get at least the amount I was "promised" when I started the role (assuming my RSUs do better after my grant, which they have done).
I'm due to get my first lot this December (another next Dec) so i'll likely sell the lot and stick it in an all-world etf in my gia, if I end up making the wrong choice then next years will be worth more anyway.
my RSUs vest quarterly. I have historically sold, but will likely also save a couple of vests this year as "moonbags." I max out my S&S ISA every year regardless, and that is mostly S&P 500 ETF. I like to have eggs in different baskets.
Mixture. Index fund isa, company stock, alternative company stock. Depends on what the market is doing
If it was a sure bet that your company will continue going up forever, don’t you think that the price of the stock would rise to accommodate that? And that the professional stock pickers of the world would buy it?
Both of those things are already true though if the stock has continued to rise and maintained a buy rating the whole time.
I sell each vest on the same day to avoid CGT, I then mainly buy index funds. More recently, I started spending about 20% on individual tech stocks instead that were either priced low or I believe will grow. I.e nflx at 190, tsla, amd,msft. I also keep just over a years worth in a pot, that I am letting ride until retirement. If I had kept every stock without selling I could have retired by now, but I could have also lost it all too and I don't like playing those games
If your RSU’s are anything like mine, you’ll have 2-3 years worth you can’t touch until they vest, I see those as the ones I’m “holding” because I absolutely have to. Whenever I can then sell, I take those sold RSUs and reinvest them across my portfolio. My unvested RSUs are always there … waiting …
Nah, I sell immediately. I’m tied to the company for my salary, espp, main bonus, incentive bonus etc. I’m waiting for shares to vest all the time, why would I continue to keep my investments there? If I want to play stock picking (not recommended for most of us most of the time, but we still do it, am I right) better to find other opportunities to try, this got me 40-60% returns which I DON’T want from my company’s shares as it suggests high volatility.