Feb 16, 2019
In this episode Derek Moore discusses situations where investors might own a concentrated position in one stock or more with low cost basis. These present difficulties as selling would incur tax consequences however owning non-diversified positions pose significant single stock downside risk.
Key Takeaways:
- • What is a concentrated stock position?
- • What are the risks of single stock holdings versus diversified portfolios?
- • Tax consequences of trying to diversify low cost basis positions.
- • Explaining options to hedge the downside and build protection on individual positions.
- • Ways to hedge portfolios using beta weighting to design downside protection.
- • How avoided losses or hedging profits can bee reinvested at lower levels
- • How hedging profits can enable investors to diversify into other strategies.
Mentioned in this Episode:
Broken Pie Chart Book by Derek Moore https://amzn.to/2COXRAS
Podcast on How Diversification Can Fail When You Need It Most https://razorwealth.com/does-diversification-alone-reduce-systematic-stock-market-risk/
Podcast on hedging for protection https://razorwealth.com/why-investors-need-a-protective-hedged-equity-strategy/