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/