Too Good to be Sustainable

"If it's too good to be true, it probably is." ~ adage

Despite the decline in the market last week, my company stock continue to rise, making a new all time high.   Our financial situation is very dependent on my company stock and is highly correlated with the stock's performance.  My company stock and stock options account for about 33% of our retirement and savings accounts, but account for over 90% of the gain in the accounts, since we are mostly invested in cash and cash equivalents.

I have no confidence the gains in my company stock are sustainable.  From 2010 to mid 2012, the stock trade in a relatively narrow range that was 10-20% below its 2007 high.   Then suddenly it broke to the upside and is now up 33% from the 2012 low, with most of the gains coming in 2013.  The last time my company stock advanced this fast was in the late 90s, and that was followed by the dotcom stock market crash.

With the company reporting earnings next week, I expect the stock to continue advancing until the announcement.  If the stock price continues to rise, I will definitely have to consider selling more positions, despite the major tax disincentives of doing so.

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This is not financial or investing advice. Please consult a professional advisor.

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