Investing
When does a winning stock become a risk?
By David Kassir
Success is how concentration sneaks up on you
Nobody sets out to bet their retirement on one company. It happens gradually. The stock doubles, then doubles again, and every trim feels like selling the goose that lays the golden eggs. Meanwhile the same company may also be your employer, which means your income and your savings rise and fall together. That is the real exposure: not that the stock is bad, but that one firm’s bad year becomes your bad decade.
There are ways to reduce the position that do not start with a tax bill. For charitably minded investors, donating appreciated stock held for more than a year can be a tax-efficient way to give: you generally avoid the capital gains tax you would owe if you sold first, the charity receives the full value, and you may be able to deduct the full market value. The deduction is subject to limits based on a percentage of your income, and it only helps if you itemize, so the details are worth checking against your own return. Selling the stock first and giving cash usually means paying tax on the gain before the gift, so less reaches the charity. It is not right for everyone, though. A gift is irrevocable: once the shares transfer, that asset and any future growth are gone from your balance sheet for good. For nonpublic assets, larger charitable gifts can require a qualified appraisal and extra tax filings. Publicly traded stock generally does not need an appraisal just because the gift is large. The strategy only fits if charitable giving was already part of your plan. It is a decision to work through with your tax advisor, not one to make on impulse. Gifting appreciated shares to children or grandchildren is a separate strategy. It generally transfers the donor’s tax basis and does not create a charitable deduction. Evaluate the recipient’s taxes and the family’s goals before transferring shares.
The point is not to sell your winners out of fear. It is to decide, on purpose, how much of your future any single company gets to control, and to use the tax smart tools that exist before concentration makes the decision for you.
Further reading · Questions to discuss with your advisor about a concentrated stock position
- What share of my net worth is my largest single stock?
- Are my income and my savings tied to the same company?
- Have I decided, on purpose, how much one company gets to control?
Related Commentary
Sources: MarketWatch, “Why Elon Musk, Anthropic and other AI titans are giving away shares” (William Gavin, October 20, 2026), quoting David Kassir on donating appreciated stock and single stock concentration.
Author: David Kassir, Managing Director of Manna Wealth Management
Last reviewed: October 26, 2026
Educational information, not individualized advice.
Before you trim a winning stock: a decision checklist
The point is not to sell your winners out of fear. It is to decide, on purpose, how much of your future any single company gets to control. Work through these questions before concentration makes the decision for you.
Know the exposure
- [] What percentage of my total portfolio is this one stock today? Not what I paid for it, what it has grown to.
- [] If this company had a bad year, what would it do to my plan? One firm’s bad year should not become my bad decade.
- [] Is this company also my employer, or my former employer? If my income and my savings rise and fall with the same firm, the overlap doubles the exposure.
Know the tax picture
- [] What is my cost basis, and how much of the position is gain? The tax bill on a trim depends on the basis, not the headline value.
- [] Have I held the shares for more than a year, so gains qualify for long term capital gains treatment?
- [] Can I stage the trims across more than one tax year, sized with my bracket in view, instead of taking the whole gain in a single year?
Know the liquidity picture
- [] What cash do I actually need in the next few years, for spending, taxes, or a planned purchase? Money I will need soon should not depend on one stock behaving.
- [] After a trim, where does the money go? A trim without a destination is just a sale. The proceeds should land in a diversified position that matches the job that money has to do.
Set the target on purpose
- [] What is the largest share of my future I am willing to let one company control? Decide the number while I am calm, and write it down.
- [] What will I do the next time the stock runs up again? A rule set in advance beats a decision made in the moment.
Check the charitable route
- [] Is charitable giving already part of my plan? If it is not, this route is not for me. If it is, donating appreciated stock I have held for more than a year can be tax efficient: I generally avoid the capital gains tax I would owe if I sold first, the charity receives the full value, and I may be able to deduct the full market value.
- [] Do I itemize, and what deduction limits apply based on a percentage of my income? The deduction only helps if I itemize, so the details are worth checking against my own return.
- [] Am I comfortable that the gift is final? Once the shares transfer, that asset and any future growth are gone from my balance sheet for good.
- [] Am I thinking about gifting shares to children or grandchildren instead? That is a separate strategy. It generally transfers my tax basis to them and creates no charitable deduction, so their taxes and our family’s goals come first.
Get a second set of eyes
- [] Have I worked this through with my tax advisor, not on impulse? The order of operations matters, especially donating before selling rather than after.
Educational information, not individualized advice.