What do you do with your vested RSUs? I heard of a very strong school of thought here to sell straight away as to diversify. Is this what most of HN generally does? Or do you have other strategies? Thanks!
Ask HN: What do you do with vested RSUs?
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Re: Ask HN: What do you do with vested RSUs?
#2Personally I have not sold all of it, but that is not the financial advice I will give. It served me well till the stocks crashed.
A way to think about it is if you had the equivalent in cash, would you spend that money to purchase that stock? If yes, then keep the RSU otherwise sell enough for your risk tolerance.
Re: Ask HN: What do you do with vested RSUs?
#3When I was getting RSU's, yes, I sold them off immediately under Rule 10b5-1 (allows selling of stock on a predetermined schedule so as to avoid no-trade windows and insider trading issues). My rationale was that I'm exposed to stock performance already through staggered vest periods (as long as I have employment anyways), and it would be best to diversify the liquid cash, same as I do with salary.
Re: Ask HN: What do you do with vested RSUs?
#4Sell with limit or market-on-close order ASAP and allocate to a diversified portfolio.
Re: Ask HN: What do you do with vested RSUs?
#5Think of it as cash. If you received $1K of vested RSUs, you have the exact same scenario of getting $1K cash. Would you buy the company stock? If so, keep the RSUs. Would you buy some other company stock, a new phone, whatever? If so, sell the RSUs and put the money to other use. The only other consideration is that if you choose to keep the RSUs, the additional wrinkle is that the stock is typically not fully liquid because you can typically sell only during certain windows during the year.
Re: Ask HN: What do you do with vested RSUs?
#6It depends on your risk tolerance and financial goals. Do you buy individual stocks? Would you buy stocks in your employer if you had the equivalent in cash? Even if you can't sell them some times during the year and there's some correlation between your employment income and its price (considering slowdown and layoffs)?
Re: Ask HN: What do you do with vested RSUs?
#7Sell immediately when they vest! I have plenty of unvested shares.
Re: Ask HN: What do you do with vested RSUs?
#8Think of it as cash. If you received $1K of vested RSUs, you have the exact same scenario of getting $1K cash. Would you buy the company stock? If so, keep the RSUs. Would you buy some other company stock, a new phone, whatever? If so, sell the RSUs and put the money to other use. The only other consideration is that if you choose to keep the RSUs, the additional wrinkle is that the stock is typically not fully liqui…
Also the value will fluctuate based on market conditions
Re: Ask HN: What do you do with vested RSUs?
#9Generally the advice is to sell immediately and diversify.
I've also had ESPP shares that appreciated significantly and therefore held onto them to get long term capital gains, then sold them into a donor advised fund (DAF) to give to charities in a doubly tax advantaged way.
Re: Ask HN: What do you do with vested RSUs?
#10When I was getting RSU's, yes, I sold them off immediately under Rule 10b5-1 (allows selling of stock on a predetermined schedule so as to avoid no-trade windows and insider trading issues). My rationale was that I'm exposed to stock performance already through staggered vest periods (as long as I have employment anyways), and it would be best to diversify the liquid cash, same as I do with salary.
Pretty much this. If you're getting regular equity grants, it doesn't take long to have a lot of risk associated with one company - your job, your bonus, your equity holdings.
Generally I sell as soon as they vest and invest the proceeds into a diversified portfolio.