On Monday, January 15, as schools and banks shut down to celebrate the life and work of Dr. Martin Luther King Jr., UPS employees had another reason to celebrate. That’s the day that your RPUs (restricted performance units) vested.
You couldn't do anything with them right away, though. For most folks, you weren’t able to trade them until your stock trading window opened - after the earnings call on February 2.
Once your stock trading window is open, you may benefit from trading your positions. Why? What’s wrong with hanging on to them? After all, UPS stock has been going up lately and there is an ownership incentive for holding a certain number of shares.
The Potential Benefit of Trading Your Shares
I have one word for you: diversification. Getting your paycheck from UPS and owning a bunch of their stock is like putting all of your eggs in one basket. We all know what happens if that basket tips over or in this case, goes down significantly in value. All investors benefit from diversification of their portfolios and shouldn’t own too much of any one stock.
But for employees, that risk is two-fold. It’s a lot less risky to have your investments elsewhere when your salary comes from UPS. That way, if something happens to the company, you don’t lose your salary and your retirement savings at the same time. You don’t want to risk being like an Enron employee in 2001.
What Should You Do?
Of course, what you should do depends on your particular situation, risk tolerance, and ownership incentive. If you have questions about your specific situation, we can help evaluate your options.
If you’d like to understand more about your RPUs now that February 2 has passed, we’ve got your back. Just give us a call at 770-800-2851 or email me at firstname.lastname@example.org and we can review the best strategy for your specific portfolio.
If we haven’t worked together before, I’d love to get to know you first and give you a chance to get to know me. You can click here to book your free introductory meeting. Either way, don’t miss out on your stock trading window and leave all your eggs in one basket!
Kevin Myers is a financial advisor and managing partner at ATL Global Advisors, an independent financial services firm serving transportation and logistics employees in the greater Atlanta area. With more than two decades of industry experience, he specializes in providing private wealth management services to business owners and their families, with the goal of helping them realize their financial dreams. Learn more by connecting with Kevin on LinkedIn.