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Discussion Starter #1 (Edited)
Hi all,

I could use a little advice/discussion/experience sharing for a scenario I have regarding my company stocks.

So every year for the past 4 years I've been eligible to purchase company stock at a good rate. Some generalized numbers:

2016 - 10K worth of shares for 8K -> now worth 16K
2017 - 10K worth of shares for 7K -> now worth 14K
2018 - 10K worth of shares for 7K -> now worth 12K
2019 - 20K worth of shares for 14K -> now worth 25K

So I've got approximately 62K in this company stock. Company stocks are held in a bank that is in France, all finances are in EUR. Vesting period is 4 years.

Now I'm leaning towards the mindset that I should start offloading my 2016 stocks, and keep purchasing each year. However the bigger question is - what the heck do I do with a EUR cash position in a bank in a different language. It's worth noting that this bank hasn't been the easiest to work with due to time zones and language differences. The account also doesn't look to me like a routine 'trading investing account' like one would see with TD Waterhouse.

If I sell the 2016 shares and transfer them, I'm sure I'll trigger some tax implications as well as some loss due to the exchange rate. For those wondering - my understanding is I paid taxes already on the first bit -> the 'discount' of shares given to me, but not on the market appreciation gain. I.e for 2016 I paid tax on the 2K that was benefited to me and it was tallied up in my T4 at end of the year.

What are people's thoughts? There's part of me that wants to let it ride as the company is strong and I don't see it going anywhere. At the same time, I feel I may be just kicking the rock down the road to be dealt with later...

Thanks for any input!
 

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Generally speaking, it is better not let a single stock take up a large percentage of your portfolio. This is particularly true of the company you work for, since if things go south, you could lose both your job and your nest egg (think Enron). As such, the most prudent approach would be to sell the stock as it gets vested and diversify into other investments.

However, if you have a well-funded portfolio that includes other stocks and bonds for your retirement, as well as a good-sized emergency fund to carry you through a year of income loss, I would be inclined to let it ride. It is kind of a gamble, but if those conditions are met, it could be harmless.
 

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Discussion Starter #3
Hmm this is good advice.

So when I look at things my wife and I have:

300 in house equity
450 in RRSPs/TFSAs in index ETFs
10 years of Defined benefit pension at wife's work

So one could argue it's about... 10% of my total equity now?
 

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Discussion Starter #4
Also worth noting - if they continue offering it each year, I'll keep buying as it's healthy stock and discount = free returns in some ways. But I wonder if 5 years from now I'll be posting how I have 100K in french stock bank and don't know what to do with it...
 

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I would set aside the house equity (since you always need a place to live in) and also the pension (since you don't have access to it yet) and just consider the 450k in registered accounts as your retirement portfolio. Then your company stock is about 14% of your portfolio, which is a bit high.

Another issue that I missed on the first read is the rate of return of the stock. The 2016 tranche seems to have grown at an annual rate of less than 5% (not taking into account the discount you received). It is worth mentioning that SPX has returned more than 10% per year during that time period. The next tranches seem to have done better. Nonetheless, it would not be worth the risk of having concentration in a single stock to get less than (or even equal) market returns. Unless you are in tech/high growth company or expecting some major catalyst causing the stock price to pop, I would be inclined to diversify into broad-based ETFs.
 

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Discussion Starter #6
I estimated the returns as I didn't want to open the portfolio, but I realize now that I shouldn't have done that. I wanted to give generalized numbers to avoid recognizing the company.

But since 2015 the company has doubled in stock value. I'll edit the numbers to be a more realistic.

Also - those are EUR, whereas my portfolio is in CAD- so the weighting is much higher I suppose given exchange rate.
 

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Looks like the company had some solid returns then. Still it is a relatively big position. I would be inclined to gradually sell as it vests and diversify into ETFs. If the stock gives good returns, you will still benefit by owning the tranches that have not vested yet (plus you get the discount).
 
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