I am actually kind of in this position and have been trying to think of a way to ask this question. It’s not a humble brag. It’s not an exaggeration. Every time I hear about diversification and all-eggs-in-one-basket I also hear “in most cases” or “in almost every case” and wonder what happens if I listen to that advice when they were actually painting me as an outlier. Yes, I want to know if I’m special. I know that’s pretentious but there are special circumstances and what if I’m actually one of them?
The stock I have could, now, just about pay my house off. It wouldn’t significantly change my life. It could also be generational wealth if some of the stuff you read about actually came true. I sold 2k worth of stock over the course of the last 3 years the would be worth over 10k right now.
Taking inflation into account, I have the equivalent of sub-$1 Apple stock in 2004. I am having one real big existential crisis right now. Usually the stories I hear about people getting rich from company’s going public etc their wealth changes overnight. I am in the middle of a multi-year event and I dont know if I should get of the boat while the gettin’s good, or just ride this thing and see what happens. I currently have a plan to divest over 4 years and I believe that I’d walk away with between 1-2 million dollars with that plan. It’s possible if I let it ride it would be very significantly more than that.
What’s your advice?
i mean with hindsight, you can take a dollar, and use some ridiculously leveraged instruments and be a billionare in a few days.
This is a false premise. You don’t really know if what you have is really the equivalent of owning Apple in 2004, unless you’re psychic.That said, sell half and diversify. Also, tell me what it is so I can get in on it.
Or you could have pets.com stock…
This is what I wished I knew sooner. Learn how to utilize options to manage my long term investments. Particularly using cash secured puts to get into an investment and selling covered calls to get out of a position.
Selling a covered call on a lot of 100 shares is basically collecting “rent” on your shares. I know this is an oversimplification and options are considered as volatile and dangerous investment vehicles by the buy and hold community. I have nothing to sell and I can’t/won’t be able to explain how best to utilize options in long term investments. You should research it on your own.
However, personally, I have been trying to buy AAPL when it hit 3 trillion valuation early January this year around $175 per share. I have been trying to buy as in I have been selling cash secured puts into the position since mid January 2022 and have been collecting a premium on my effort. As of today, I still don’t own any shares but have collected over 2K for my effort. This is utilizing $15,000 in capital.
Once you learn just how to sell a cash secured put to get into a long term investment and sell covered call on your shares, its going to change how you answer the question “do I sell or hold”.
I can’t tell you what to do but here is what I have been doing. I have been sitting on Apple stock (and a lot of other stocks and mutual funds that pay dividends) for quite a while. I paid one of my houses off early without cashing in, I just paid extra for each mortgage payment at a low fixed rate, and it took quite a few years off the length of the mortgage.
A bit of a differing opinion here for you. Assuming your premise is correct? Do not sell under any condition, move into a shack in Wyoming if you have to, and wait till the last possible moment to touch it. Paying off your house isn’t really a lifestyle upgrade, just a small peace of mind. Selling stock that one day may 100x is the opposite of peace of mind. But of course, its just a gamble. Fledgling companies go bust quickly and randomly; if its not a company you’re keeping close tabs on, then maybe consider diversifying.
My advice, take the gains off the table and leave the principal, pay off your house. Live a life of freedom with no payments. Not to sound like Dave Ramsey but when you have no payments in the world, no one can tell you anything. You can invest more, you can take more time off, go on more vacations, pursue other avenues, whatever you’d like, you’re free! And if you don’t like it and you miss having payments you can go right back into debt if you’d like hahaha, do a home equity loan/ sell and put it right back into Apple.
The price of the stock is what the market currently values it at. Unless you have some secret info that make you so sure of this stocks success in the next x years, I wouldn’t count on it.
​
It’s ultimately your decision. If you had however much money to pay off your house in cash, would you buy your company stock?
What would you regret more in 4 years, losing $25k or having sold $25k worth of stock that is now worth $500k?
Let your gut answer than and you’ll know what to do.
I’ve been trying to ask this question a few different ways over the course of the last week or two. I get that it’s an unpopular thing to do. I expect and probably deserve the downvotes and limited community feedback. I have reached out to half a dozen financial advisors. I have books I’m waiting for the library to come in so I can start educating myself. I know that I am extremely lucky to have this problem. But this situation is driving me nuts. I feel like the right thing to do is divest and move into something more diverse but also I could start divesting thousands of shares and watch tens of millions of potential disappear and just have a paid off house to show for it.
I’m just hoping for one nugget of decent advice or at least something to make me feel more comfortable walking away from this and doing the sensible thing that 99% of everyone seems to suggest.
thanks in advance
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Asking this question honestly versus this hypothetical comparison probably would have been better but I’m a coward and am super nervous about talking about the place that I currently work online.
Without knowing your age, the rest of your financial situation, or goals – it’s kinda hard to help you.
If I was in your situation, I may consider reducing risk but taking the tax hit is going to be lame. Probably worth it to speak to a fiduciary and evaluate your portfolio, age, goals, etc.
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