Hold or sell Amazon shares?

conradmum

My husband currently works for Amazon and receives shares in that company as part of his compensation. I was wondering if it would make sense to sell the shares during one of the periods when it's allowed and use the money to invest in a fund or index tracker in order to spread the risk. Amazon shares are worth a lot now but aside from his pension they're the only shares he owns. On the other hand, there may be tax implications. He currently salary sacrifices most of his income in the higher tax bracket. He'll probably retire in about ten years. 

Prism

Its probably worth it to spread the risk. You won't be alone this year as Jeff Bezos has been selling chunks of his Amazon shares this year. See where you are at with capital gains tax.

steampowered

He should sell the shares as soon as he can do so without penalty. Instead, buy a diversified investment - such as a FTSE All Share fund, which invests in lots of different companies.

Holding a big investment in one company is never wise as its extremely high risk. Amazon is a fine company but you'd never put everything into one company if you were investing sensibly.

There are unfortunately a number of threads on this forum by people who were in a similar position to your husband, and kept the shares they got from their employment, only to find out they were worth a fraction of their original value. Often in the case of people who got shares while working for banks.

conradmum

steampowered said:

He should sell the shares as soon as he can do so without penalty. Instead, buy a diversified investment - such as a FTSE All Share fund, which invests in lots of different companies.

Holding a big investment in one company is never wise as its extremely high risk. Amazon is a fine company but you'd never put everything into one company if you were investing sensibly.

There are unfortunately a number of threads on this forum by people who were in a similar position to your husband, and kept the shares they got from their employment, only to find out they were worth a fraction of their original value. Often in the case of people who got shares while working for banks.

Wow, I didn't know that. Thanks for the warning.

burner04

Yes indeed, Amazon is a fine company 

md258

Sell them.

In the worst case, if something happens to Amazon, your husband could end up with shares worth far less (or £0) and no job. If things go well, his future shares will be worth more when you sell them and he may get a bigger pay rise/bonus.

Heedtheadvice

Yes diversity. Currently job, pension and investment all with Amazon.

MaxiRobriguez

I also agree that selling and buying a broader fund is *probably* the sensible thing to do in order to reduce risk, but it is not certain to be the right thing to do in terms of pure investment gains. Ultimately no one can beat hindsight, you just make decisions on information available at the time.

Other thing to consider is tech stocks vs the rest of the market are at record levels so if your husband is selling now-ish and reinvesting in the broader market then he will get more units in whatever fund(s) he buys because the selling price of his Amazon stock is higher than it otherwise might be.