What is Equity Management?
Equity management means different things to different people. For some it’s about moving quickly in and out of stocks to profit from short-term market swings. For others it’s about buy and hold, a passive equity asset management strategy that involves taking the long view (to what some might consider an unhealthy extreme). At The Family Heritage Trust Company, equity management means striking a healthy balance between the two approaches.
It’s about doing our due diligence to identify long-term economic trends and investing in companies likely to follow these trends—trends that may last for longer than a year. It’s about helping clients reap the rewards of being owners of good businesses for extended periods, like the favorable tax treatment associated with long-term capital gains.
Our approach to equity management also means lower portfolio turnover and, therefore, lower equity asset management costs. Finally, it means adhering to industry best practices that ensure sector and issue diversification as a proven way to manage risk.
In an age that feels like everything’s DIY, there’s still a place for professional equity management services. People who understand your financial goals and know how to achieve them. At the Family Heritage Trust Company, that’s what equity management means. There’s a lot to understand to truly take control of your finances, so let’s get into it.
A Deeper Look
We could talk about equity management for quite a while. Every facet of it can be peeled back to reveal layers upon layers of definitions, strategies, and other details that form the whole picture, but let’s discuss the big categories, shall we?
- Equity Compensation Strategy: Making decisions around your stocks can have wildly different outcomes depending on when those decisions are made. Knowing when to exercise stock options, sell your shares, or hold them for long-term gains is a tough thing to do yourself. Partnering with a professional can yield ideal results.
- Portfolio Management: This involves aligning your equity holdings with your broader investment strategies. Generally, the goal is to keep your investments diverse and reduce your exposure to volatility.
- Tax Planning: Navigating incentive stock options, non-qualified stock options, RSUs, and RSAs can be daunting. It requires careful planning of which a financial professional can ease the pressure.
- Legal & Regulatory Awareness: Trading restrictions—like insider trading laws and blackout periods—is key to ethical investing.
- Exit & Liquidity Planning: Always have a backup plan. For employees of private companies or startup founders, this means having something in place that will protect you from IPOs, mergers and acquisitions, and secondary market sales, to name a few.
Professional Personnel and Tools
Equity management often starts small—maybe being isolated to a single spreadsheet—but if you want to be diligent, an expert approach is needed. When you combine the expertise of financial advisors and tax professionals with equity tracking platforms, you’re setting yourself up for success.
We often fear the unknown, and for many, the wide world of money is full of unknowns. Our team can help you understand the process and take that fear out of the equation. Get in touch with us to make sound decisions today. You’ll find empowerment in our equity management services.