Quicken 2013 restricted stock units

Users browsing this forum: Shorting your own employer Discuss all general i. Right now this is a hot field and pay is accordingly quite good. However, I have concerns that this won't always be the case and this industry in particular has had dramatic ups and down over the last 20 years.

At this point in my career, a significant part of my "net worth" is future earning. If the field stays hot I am in great shape, but another.

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While my job is pretty stable, an industry wide drop, while probably temporary, would be harmful to my future earning potential. I also have a pretty sizable chunk of unvested RSUs that are way up from when they were assigned.

All in all, I feel very over exposed to the tech industry in general and my employer in particular. I am considering taking what would be essentially a short position on the industry or my employer directly. It seems like this would for a fee , lock in the value of the RSUs and reduce the exposure that I have to my employer that is inherent when your salary is a significant percentage of your net worth. I have not fully worked out the exact mechanism inverse etf on the tech industry?

I typically try to avoid investments that require complex hedging strategies to sleep at night, but in this case where the exposure is somewhat forced it seems like a reasonable course of action. Has anyone done any thing similar? Are there any major flaws or pit holes you would anticipate? Is this a terrible idea? Per Taylor's suggestion to define RSU What Are Restricted Stock Units? RSUs resemble restricted stock options conceptually, but differ in some key respects.

RSUs represent an unsecured promise by the employer to grant a set number of shares of stock to the employee upon the completion of the vesting schedule. Some types of plans allow for a cash payment to be made in lieu of the stock, but this type of plan is in the minority. Most plans mandate that actual shares of the stock are not to be issued until the underlying covenants are met.

Last edited by driftingaway on Mon Dec 23, 1: If you want to be conservative and hedge, diversify. What you are proposing is heinous risk. This definition of RSUs from Investopedia may be helpful I had to look it up: What Are Restricted Stock Units?

Therefore, the shares of stock cannot be delivered until vesting and forfeiture requirements have been satisfied and release is granted. Some RSU plans allow the employee to decide within certain limits exactly when he or she would like to receive the shares, which can assist in tax planning.

However, unlike standard restricted stockholders, RSU participants have no voting rights on the stock during the vesting period, because no stock has actually been issued. The rules of each plan will determine whether RSU holders receive dividend equivalents.

We have to go through compliance pre-approval before trading individual stocks or anything thing other than vanilla mutual funds. Shorting her industry might get approved, a request to short the company would definitely not. You are talking about taking a long term short position against what has been the pretty much the main engine of growth in the world economy since when Bardeen Shockley and Brattain invented the transistor.

For one, if I was your boss or in your chain of command and found out somehow, I'd fire you on the spot. That also assumes there's no reporting policies in place regarding such a thing - many companies require reporting any stock transactions outside of a standard k offering.

I would just diversify as much as you can - cash out the RSU's as they vest and invest that money in another sector, stay away from the company stock plan in the k, etc. Shorting a competitor, as you suggest, may avoid my concerns, if you're truly worried about the entire sector and not just your company. I track our assets to the penny using Quicken, but I don't track RSUs or deferred cash either at all, and we're talking a 7-digit amount.

It's not ours until it's ours. I think that's a better way to think about it and sleep peacefully. If you think of it as pennies from heaven rather than as an asset to protect, IMHO you'll be happier.

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My concern is a hit to the entire sector, I just feel overexposed to the industry. I may have sidetracked my own thread a bit. I'm not really overly concerned with the RSUs.

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More that my earning potential in the industry as a whole would be negatively affected. Let's say you're a software developer. If your employer decides to offshore development, your employer's stock might go gangbusters, but your comp might suffer. Life's complicated enough without imperfect hedges.

The tech bust really wasn't all that bad, employment wise. Only those on the low end of the skills spectrum really had much to worry about. For almost everyone else, is was close to a non-event. I would expect any dips in the near future to be even less severe. To answer your question, I don't have any ethical problems with shorting your own employer, but I don't think that's really an efficient way of managing unemployment risk.

You're better off just saving as much money as possible over the next 5 or 6 years. By that point, you should have enough saved to be able to move to a cheaper area of the country with less volatile tech industries and still be well ahead of the curve, retirement-wise.

Most people make the mistake of associating the way business is done in SF with the way business is done everywhere else.

Silicon Valley is its own thing. While another tech bust might hurt employees of the more speculative startups there, it wouldn't affect employees of the profitable companies elsewhere. Last edited by KyleAAA on Mon Dec 23, 2: I love simulated data.

It turns the impossible into the possible! I think I've been sold on "not a great idea". You could buy deep out of the money puts, or other derivatives far from the strike price. They would cost something, but not very much. I agree that you are unlikely to be able to do that with your firm.

You could set up automatic sales of your vested stock if you wanted to diversify. To avoid insider trading issues you would have to set this up with the company, but many people do this. If you wanted to be diversified, you could end up with your only long position in your company to be in your restricted stock. We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either --Swedroe We assume that markets are efficient, that prices are right --Fama.

I'm wasnt intending to try to capture little dips but a significant drop in the industry that would affect my employment options. I have been sort of convinced by the people telling me it might be hard to put together a hedge that actually captured the risk of that without setting off red flags at my own employer. The way this would play out is: Things get tough, and you get laid off, along with a bunch of your colleagues. The market sees a company downsizing to right their balance sheet, and the stock goes up even further, making your losses on your short even worse.

If you really think your company in particular has issues, find another job. Not much can be done for this one other than saving like crazy during the good times if you suspect that they might be limited. I am not real knowledgeable about how to do this but a quick Google search found this; http: The downside of course if that it would either cost you money, lock you out of future gains, or both depending on how you set it up.

You would need to be careful that you do not get yourself into a situation where you could get into trouble if you were laid off or something before they were vested. If you are dealing with a large amount of money that is tied up in the restricted options it would be a good idea to get a fee only professional advice on what you can do to protect yourself form a large drop in value as well as how to minimize the taxes once you are vested and want to sell them.

For a large amount of money this is not a thing to try doing on your own so paying for a few hours of an accountants time is well worth while. I've been pretty well convinced that it either wouldn't work or is ill advisable. My career is going pretty well, I appreciate the advice, just had an idea that I figured I would run down. Were you around in ? Last edited by WendyW on Tue Dec 24, 8: I focus on maintaining hard skills that are in demand.

Soft skills pay more, but tend to be the first to go in a crisis. If a crisis happens again, I'll just consider it an extended and much needed vacation. The advice about using options, we have already pointed out is illegal in this case Not his particular company.

Maintaining skills is always a good idea, but if the industry tanks, then the demand for people with these skills goes down as well. He wants a way to protect against such a decline. Having a diversified portfolio will help, but depending on how much of his wealth is in company stock, he may not be able to achieve that without some sort of hedge to reduce his weight in his industry.

Our employers, on the other hand, would like us to have a long position in the company. The practical solution is to accept the incentive shares and options from your employer, but to sell them off as soon as they are vested. Don't be like the employees at Enron who loaded up on Enron stock, and then simultaneously lost their job, savings, and pension.

This isn't the same as shorting the tech sector, but it avoids you adding additional exposure to the tech sector in your investments.

You would buy sector funds or ETF's in proportion to the market, but without the tech sector. This portfolio would be a passive low-cost one that is broadly diversified, just without tech. First, it would take a humongous and risky investment to provide any meaningful amount of hedging.

Second, you are a sample size of one. Your salary is not quantitatively tied to and does not track your employer's stock price. It is not as if your salary underwent ripply annual fluctuations, and your short positions underwent nicely equal and opposite ripply annual fluctuations. This sort of maneuver might theoretically make sense on the level of the company as a whole. For example, one might FANTASIZE that a company's HR department could invest in a short position in the company's stock and use it to provide a generous severance benefit in the next mass layoff.

I think that could theoretically work from an investment standpoint. And even thinking vaguely of what your plan B might be if software development in the United States goes down the tubes, the way it did in the early s.

Well, actually, you know, it didn't, but everyone said it would! We were about to be buried by Japanese "software factories. Very seriously, for one example, it couldn't possibly hurt to become fluent in a relevant language other than English. I bet that is more likely to hedge a U. Letting alone the fact that shorting stocks is terribly risky, and even though I am not not NOT an exponent of positive thinking, seems like If you are thinking about shorting your employer's stock, you may want to "get in touch with your feelings" and see whether you are thinking about that because you feel hostile toward your employer Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Good catch, I can't actually short my employer. I could however a similar company that you would expect to experience similar behavior in temporary collapse of the industry.

Where did you get the idea that it is illegal for a general employee to buy or sell a competitor's stock. A general employee can buy or sell anything they want. An exception would be a blackout period at the end of a quarter before an earnings announcement which prohibits trading on company stock within a retirement plan.

And sabotaging a merger? Not unless they are privy to inside information, which is illegal for any trade, not just your own company or a competitor. How could a company possibly know what stocks you hold in your personal investment accounts? How could it be any other way? Otherwise you would be prohibited even from owning the Vanguard Total Stock Market Fund.

Otherwise it would be a completely unenforceable rule. Companies are not usually so stupid that they write unenforceable rules. Whether or not it is wise to short your own company is a financial decision, not a legal one. Folks are way over-doing the legal drama. A general employee can trade anything they want in their personal investment accounts. Even if they're not normally executive, things could get tricky. My wife works in IT and does not have access to insider information.

Heck, her admin with even less possibility of access has the same restrictions on her. I think it falls under the heading of "better safe than sorry. If an employee willingly signs up front to a job that requires them to submit trade confirmations to their employer, then they get what they bargained for.

I am youngish 29 and I work in the software industry. That sounds like lazy management. They put unnecessary burdens on employees for "ethics theater" in order to keep the regulators off their back. Last edited by TomatoTomahto on Thu Dec 26, 8: To try to explain what is going on. Let's set aside whether ethics courses make for ethical employees: If you work in financial services, you face dealing restrictions. But IT, mail room, printing, reception The regulatory and reputational risk to the firm is huge, so it has to be controlled.

Note that if you work for a public company, AFAIK you cannot trade the stock during the accounting close period for the annual results for a Dec Year End company, basically from about 7th Jan to about 15th March, ie the audit period. Your average worker bee should have no legal concern about trading whatever they want including buying puts on their company stock as long as they are not insider trading. As someone mentioned above, finance theory would say that almost all of us are too "long" on our employers.

I'm with Jack on this one. First, I can't think of any examples where a company was laying people off and simultaneously had their stock go through the roof. Who is online Users browsing this forum: Home Board index All times are UTC No guarantees are made as to the accuracy of the information on this site or the appropriateness of any advice to your particular situation.