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Post: The Moneyist: ‘I’m 44 and want to retire in 10 years’: My husband’s tech firm gave him stock. It’s now 40% of our net worth. Should we diversify or hold?

Dear Quentin,

My husband and I disagree as to whether he should diversify his tech stock.

He was granted this stock during his five years employed with a tech company. It wasn’t worth much at the time. Now, the company is a household name.

As a result, the value of this stock has gone through the roof, and it now makes up 40% of our net worth. 

We have been married throughout this journey, and it is thrilling to have stock that is worth more than our house or retirement accounts.

‘I want to sell at least some of the stock and diversify.‘

I want to sell at least some of the stock and diversify. I find it too risky to be so heavily invested in one stock.

My husband continues to believe in the company, and it’s a point of pride for him to be a foundational part of its success. 

When we talk with our financial advisers they have brought up diversification, but it is a non-starter for my husband. 

I’m 44 and want to retire in 10 years. My husband feels the same way.

What would you recommend in this situation?

Tech Wife

Dear Tech Wife,

You can’t win without losing, or lose without winning. You diversify and the stock continues to climb Amazon- or Tesla-style, or you hold 100% of the stock and it takes a nosedive along with an increasingly volatile stock market. 

Or maybe you go full throttle and diversify — as all financial analysts rightly advise, I should add — and you thank your lucky stars that you did after the stock goes south, and you putter along with reasonable, if not spectacular, growth.

You could meet halfway: Sell half and hold half. You’ve halved your risk, and you are both betting on your own respective options. Whatever you do, make a pact for a recrimination-free outcome. Monitor, evaluate and revisit.

People bring their own experiences: If someone invested in Enron and their portfolio blew up, they’re going to plead with you to diversify ASAP. If they were an early Amazon employee, they’ll be smiling from their San Francisco manse.

‘You could meet halfway: Sell half and hold half.’

Just because you use a product or service does not mean you should hold that stock, and emotional involvement does not equal success, so do your own due diligence on the stock and analyst reports, and familiarize yourself with competitors. 

I’m reminded of the fable of the woodcutter with three wishes. He rescues a fairy from under a fallen tree, and is granted three wishes. His wife wishes for sausages, he gets annoyed because and wishes a sausage becomes stuck to her nose. 

And then? They realize their disagreement cost them dearly, so they wish for them to be removed from the woodcutter’s wife’s face. They end up back where they started, but they realize they were happy before the wishes were granted.

One more tale from the Moneyist Facebook Group: “My mother’s friend had stock her husband earned and he wouldn’t diversify. The company was a household name. They had a 40-room house in Denver. He died. The company no longer exists.”

I’ll leave that with you with God’s — and that fairy’s — blessings.

Yocan email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

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