Stock Options and Wealth

But then I got to thinking that I shouldn’t really be worrying about it right now. I won’t be fully vested for another 2 .5 years. In addition, I stand to receive another grant in the spring of ‘07 so the lower the price is then, the cheaper my options will be priced and the more value I can hope to earn from them. Also, I buy shares through a share purchase plan every month and don’t plan on selling anytime soon (I will sell some when my company position becomes 5 – 7% of my portfolio). The lower the price they are the more shares I can accumulate. If you believe some of the news reports out there then this is the beginning of an extended retreat in energy stock prices – but I have written about being cautious with the media before.

What do I plan to do? (1) Hope that as my options start to vest I will realize some good money out of them but not banking on them in any concrete fashion – they have no cost to me from a cash perspective so in effect I don’t really lose anything if they don’t go anywhere, and (2) Monitor my stock holdings through the share purchase plan and ensure that it does not become too big a chunk of my portfolio – as the shares appreciate over time I will trim back my holdings to diversify myself into other areas (i.e. dividend growth stocks).