Key Takeaways
- A single equity position representing 5% or more of your portfolio can be considered a concentrated position—and has inherent risks.
- The most straightforward strategy to managing such a situation is to sell off some of the position, usually over several years to spread out tax liability.
- Gifting appreciated securities to charity also has potential benefits, as they are typically fully deductible, up to 30% of your adjusted gross income.
- Some investors might consider hedging strategies to manage risk and protect against volatility, or exchange funds, which can help you diversify your position without immediately realizing capital gains.