You're probably overexposed to your company stock. Here's why that matters

I had a conversation with a client recently about the "Mag Seven” valuations, momentum, the usual market discussion. But we quickly moved past that to something more fundamental, more urgent: their financial exposure to their employer. It's the elephant in the room, and frankly, most people don't want to confront it.

Let me be direct about what I observed. Working for a publicly traded company presents a seductive compensation package. Salary, yes. But also a defined contribution plan, stock purchase matching, options, and RSUs. On paper, it looks generous. It is generous. But it's also a trap if you're not disciplined.

Here's what typically unfolds. The stock appreciates. Office culture shifts overnight. You've got colleagues constantly talking about it—at the water cooler, in Slack channels, everywhere. FOMO takes hold. You start believing the narrative: if you're patient and committed, you'll build real wealth, just like the founders did. Buy and hold becomes doctrine.

Then reality intrudes. Tax considerations make selling feel prohibitive. And here's the thing—companies understand this perfectly. That's precisely why they structure compensation this way: to build loyalty, to keep shareholders stable, to reduce volatility. It's intelligent business design. But it's not necessarily intelligent for you.

The risks are clear:

• Underperformance: Your stock lags the index, compounding into material long-term wealth drag
• Market drawdowns: Planned retirement or major purchases get indefinitely deferred

• Individual collapse: You retain employment but lose 90% of savings (RIM, Shopify, Bombardier)
• Bankruptcy: Both income and savings disappear (Nortel, Lehman, Bre-X Minerals)

Institutional portfolio management considers anything above 5–7% exposure to a single security as excessive concentration risk. Most employees operate at two to four times that threshold.

The critical question: What's your actual exposure? Is it intentional, or simply the path of least resistance?

If you can't answer with precision or unsure we should have a conversation.