Keep RSU or reinvest the money?

btcp

jimjames said:

How do you know what the directors have in their portfolios? All you're seeing is one share. Yes it is risky to hold just one share but they may well have much larger portfolios and the share you know about could be a tiny percentage of it. So I wouldn't base any decision on what someone else is doing, make the decision on your situation.

good point, I don't know. I just see how much they have and how much they sell. they are much reacher than I am so I suppose the comparison is irrelevant.  Bezos recently sold a lot of Amazon shares, and the news followed that he is leaving. And these are only the top of the iceberg we know about.

Notepad_Phil

btcp said:

1st point - I suppose you hope it will not happen to you, while you are working for a big technology company

Ever heard of Digital Equipment Corporation? Over 140,000 employees in 1987, merged (though actually more like a takeover) with Compaq in the late 90's with various bits of Digital sold off. Compaq itself then went through problems and was merged/bought by HP in the 2000's.

EdSwippet

btcp said:

I'd benefit from some advice on keeping RSU vs selling and reinvesting. 

Suppose your employer had given you a cash bonus instead of a bunch of RSU shares. Would you use that cash to buy shares in your employer?

If you answered 'yes', then hold. If 'no', then sell.

btcp

Notepad_Phil said:

Ever heard of Digital Equipment Corporation? Over 140,000 employees in 1987, merged (though actually more like a takeover) with Compaq in the late 90's with various bits of Digital sold off. Compaq itself then went through problems and was merged/bought by HP in the 2000's.

I haven’t heard of them no. How did it impact the stocks? Mergers is a normal practice in tech these days, and quite often the stocks of an acquired company rise in price after they merger with a bigger one. 

btcp

EdSwippet said:

Suppose your employer had given you a cash bonus instead of a bunch of RSU shares. Would you use that cash to buy shares in your employer?

If you answered 'yes', then hold. If 'no', then sell.

Hmm that’s an interesting question. If it was a large amount of money, I probably wouldn’t buy a single stock and rather invest in a fund. Having said that, I am also participating in stock purchase where I am buying company stocks with a 15% discount. I am not keeping them long term and sell once they become available to make money on discount. 

steampowered

Let's say your shares are worth £50,000. If you had £50,000 in cash, would you rush out and use it to buy shares in this company? 

If the answer to that question is "no", you should sell your shares as soon as possible - and instead invest in a passive multi-asset diversified fund, such as a Vanguard fund (other options are available).

You should not kid yourself into thinking that you know what is going to happen to the share price of this company. Putting all of your eggs in one basket is a massive gamble.

btcp

steampowered said:

Let's say your shares are worth £50,000. If you had £50,000 in cash, would you rush out and use it to buy shares in this company? 

If the answer to that question is "no", you should sell your shares as soon as possible - and instead invest in a passive multi-asset diversified fund, such as a Vanguard fund (other options are available).

You should not kid yourself into thinking that you know what is going to happen to the share price of this company. Putting all of your eggs in one basket is a massive gamble.

Looks like everyone is saying the same thing, so I am probably kidding myself

I have VLS but the question is which one to get if I sell stocks. Over the last 2 years I put some money in 60, 20, 80 and 100 with an idea that the higher risk ones  are there for a longer term and the lower ones are there in case I would want to access the money sooner. Interestingly, my 100 is underperforming while 60 & 80 have relatively high growth. The 20 has 1-2% growth on and off.  It’s probably because I bought them all in different times, and I am now trying to drop feed in the 100 and see if it evens out. But I also think I have too many, so maybe having 20 and 100 is enough.  I already had this discussion but just didn’t make up my mind what’s the best course of actions. 

MX5huggy

You are well over complicating VLS if you are doing that. If you have £1000 in 100 and £1000 in 20. You have £1200 in Equity and £800 in bonds or 66/33 just buy VSL 60, it will perform the same (apart from the 6% difference). 

btcp

MX5huggy said:

You are well over complicating VLS if you are doing that. If you have £1000 in 100 and £1000 in 20. You have £1200 in Equity and £800 in bonds or 66/33 just buy VSL 60, it will perform the same (apart from the 6% difference). 

What I was also trying to do is to put money in different pots from the perspective of time I may need to access it. For instance, if I need money sooner I could sell VLS20 as it is less likely impacted by market volatility. At the same time, my 100 fund have a higher chance of go down in value at the point of time I’d need to cash in. Does it make sense? 

Notepad_Phil

btcp said:

Notepad_Phil said:

Ever heard of Digital Equipment Corporation? Over 140,000 employees in 1987, merged (though actually more like a takeover) with Compaq in the late 90's with various bits of Digital sold off. Compaq itself then went through problems and was merged/bought by HP in the 2000's.

I haven’t heard of them no. How did it impact the stocks? Mergers is a normal practice in tech these days, and quite often the stocks of an acquired company rise in price after they merger with a bigger one. 

Digital Equipment was at one time the second largest computer company in the world (behind IBM). The fact that you've never heard of them gives some indication of what happened to the share price. It fell by more than 50% within the year in the late 80s when their problems first started. Ten years later the price had never recovered and actually was down about another half at the time of the takeover/merger and during that time more than half of the employees had been jettisoned. Many of these had big percentages of their wealth tied up in Digital stocks as they had invested when they had only seen the share price rise and then never got around to selling them, as of course the price would surely recover