It's also common for some of the stock to be surrendered immediately to pay the tax bill when the stock vests, but the point is: you're taxed on that shiz like it's ca$h money income anyway, so you may as well do what you want with it (whether that's hold or sell to diversify).
👉🏼 Sidebar: While it's certainly possible to outperform the market with your company stock, I’m not a big fan of holding a large portion of your portfolio in individual stocks in general.
A 2021 JPMorgan study examining the "loss probability" of individual stocks found that 66% of stocks in the Russell 3000 trailed the index as a whole between 1980 and 2020 (which is a fancy way of saying, 6 in 10 individual stocks that made up the index actually underperformed the average of the 10 overall).
🪙 All that to say: You have worse than a coin flip’s chance at working for a company with a stock that beats the index over the long run.
As always, consult your tax pro before making any ~big moves~! this week's episode of The Money with Katie Show dives deeper.
Presented by TaxAct
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