Am a Teslanaire... now what?

[heems]

Some context before I ask my question:

So with the recent rise and split I am lucky enough to be in the Teslanaires club. Interestingly enough, the brokerage I am holding my equity at must have had an alarm go off on their screens. They reached out and while congratulatory expressed concern about my now very concentrated position. They are now putting me in touch with a couple of financial advisors. Also I should qualify that I am not very financially adept with options and advanced financial instruments. I have just been a simple long investor who added to his TSLA position over the past 8 years.

From a protection perspective, I am getting some suggestions from the FA from covered calls, to "cost less collar", to equity exchange. All of which sound a bit over my head (at this time anyway). Are these good strategies, and/or is there significant risk of losing my equity position?

Note I certainly don't want to liquidate the stock any time soon. If anything I am still long for the next 4-5 years at which time if Tesla does 3x or 4x then I would just retire. But I am also unclear what that means. The capital gains (15%+10% in cali) is pretty significant on the gain at that time. So that's another issue to mitigate down the road.

Anyhow I wanted to run my situation by the group here and see what other recently lucky folks are doing with their new found positions. Thanks.

 

[ggr]

Some context before I ask my question:

So with the recent rise and split I am lucky enough to be in the Teslanaires club. Interestingly enough, the brokerage I am holding my equity at must have had an alarm go off on their screens. They reached out and while congratulatory expressed concern about my now very concentrated position. They are now putting me in touch with a couple of financial advisors. Also I should qualify that I am not very financially adept with options and advanced financial instruments. I have just been a simple long investor who added to his TSLA position over the past 8 years.

From a protection perspective, I am getting some suggestions from the FA from covered calls, to "cost less collar", to equity exchange. All of which sound a bit over my head (at this time anyway). Are these good strategies, and/or is there significant risk of losing my equity position?

Note I certainly don't want to liquidate the stock any time soon. If anything I am still long for the next 4-5 years at which time if Tesla does 3x or 4x then I would just retire. But I am also unclear what that means. The capital gains (15%+10% in cali) is pretty significant on the gain at that time. So that's another issue to mitigate down the road.

Anyhow I wanted to run my situation by the group here and see what other recently lucky folks are doing with their new found positions. Thanks.

One of my advisors talked to me about "equity exchanges" a couple of years back. I didn't put much time into researching it but it sounded like a great way for him to make money while effectively diversifying my portfolio. Buy stock and continue to hold it, would be my advice if I was competent to give advice.

 

[Sudre]

I simply asked my FA if his people/funds did better on any of their investment when they came to me with that garbage in 2014. He did not have a single fund to offer a return of buying in at $29 and hitting $200 inside a few years. He never bothered me again. Now I just call him and put in a sell order at 4 to 5 times the current stock price so he gets an idea where my thoughts are on the matter. WHEN we get close to that number I call him, rub it in his face, then raise the sell.

Most likely your FA is looking for a commission for convincing you to go to a particular investment strategy.

This is actually a good watch and funny....

 

[Mo City]

I hit $1M about 4 months ago and sit on the doorstep of doubling that.

My advice: Shut 'em down and say you don't want to hear from them anymore. This is what I did. Who needs a FA when HODL is the strategy?

Be very careful with these FAs. Their sole purpose to earn fees from you. There is a reason they waited to contact you.

 

[pz1975]

If they were better at their jobs, they wouldn’t be financial advisors at some bank/brokerage. They’d be millionaires like you (and many of us) and having to fend off leeches trying to skim off the top of their profits. Stick to your plan and trust your research.

 

[Az_Rael]

I am getting some suggestions from the FA from covered calls, to "cost less collar"

Options are not for the faint of heart, and I would not recommend them unless you fully understood what the risks were. Covered calls are a way to hedge, but you have to be OK with potentially getting exercised and having to sell 100 shares or to buy back the call for a loss if you don’t want to lose the shares. Normally it is relatively low risk, but Tesla stock is as volatile as a penny stock, so your chances of a big swing causing you to get exercised are higher.

covered calls are a great way to make some premiums while you wait for the stock to hit a limit price you are willing to sell at.

 

[CLK350]

Not a Teslanaire (yet), but I'd say, If you *really* insist on diversifying, do your own diligence - for example get some into BRKA/B, SQ, ARKG and some crypto. Forget FA's, obviously not going to be as good as you just HODL ing. As far as covered calls are concerned, there's a TMC thread just for this, requires some work, and you may lose big on big upswings, so maybe stick with HODL https://teslamotorsclub.com/tmc/threads/applying-options-strategy-the-wheel-to-tsla.191290/

 

[Robertj]

I have left my gains to run
70 % stock
30 % leaps
Happy to ride the ups and downs, although they may involve ,lots of zeros

 

[Causalien]

I tell everyone who ask me to just keep reading the investor thread and ask questions on this forum when they are ready to make a move. The alarm bell rang cause they want to earn fees from you. And btw, they should be giving you a relationship manager at this point.

I've been rolling in this mess for a while and I've never heard of equity exchange. They, like politicians, enjoys inventing new words that means the same thing so they can fleece new ppl. But selling covered calls just have the effect of lowering your input cost, or earning some interest in the mean time.

I wouldn't be surprised that they have a net short on TSLA and just want to trap you into selling them your shares.

Congratulations.

 

[SPadival]

If a FA comes near you, run for dear life. They will try to sell you products where THEY get the maximum commission. The concept of a fiduciary is just theoretical.

 

[heems]

Wow, lots of dislike toward the FA world it seems. Ok good to know to watch out for that. Like I said I am not looking to divest my position at all. If anything I keep adding. And to be fair, none have suggested I sell or buy other products from them (yet). I wouldn't mind some "insurance" but indeed the wild swings do make it likely that the options get exercised I suppose. I need to better understand that. And I still need some tax planning to minimize that pending 25-30% capital gains. Specially if we do a 3-4x in the next 5-7 years. I think as long as the FA doesn't go down the divesture path, provides some options for insurance that I can understand, and minimizes the tax outlook for me those pieces would be of value to me.

Thanks for the input.

 

[adiggs]

Wow, lots of dislike toward the FA world it seems. Ok good to know to watch out for that. Like I said I am not looking to divest my position at all. If anything I keep adding. And to be fair, none have suggested I sell or buy other products from them (yet). I wouldn't mind some "insurance" but indeed the wild swings do make it likely that the options get exercised I suppose. I need to better understand that. And I still need some tax planning to minimize that pending 25-30% capital gains. Specially if we do a 3-4x in the next 5-7 years. I think as long as the FA doesn't go down the divesture path, provides some options for insurance that I can understand, and minimizes the tax outlook for me those pieces would be of value to me.

Thanks for the input.

My minor contribution - if you're doing anything with stock options, then come visit any of the options trading related threads here in this forum. I'm personally active in "the wheel" thread which is focused on selling options, but the other threads on trading and options trading and advice will all provide insight.

And the #1 point I make to anybody - get some education on stock options (whether your'e trading them, or somebody else is doing so on your behalf). Plenty of repetitions of a link to a site I've used (as have many others) - it's about 30 hours of videos, and represents about the minimum education level I would personally use to start buying or selling options.

(If you come to the wheel thread, read page 1 to get started, which will include that link I mentioned earlier).


I won't go into details - they're elsewhere and readily available. But as others have pointed out - options can be really good, and they can be really bad. So learn before doing

 

[MABMAB]

Good question.

I've had a long standing investing plan. I'm gonna stick with that. If you do not have an overall investment plan, I would get one. Talking to people can help, I've ignored most of what they have told me.

What do you want?
What do you need to do to get those things?
Do those things.
Evaluate.
Adapt.

Many people do not adequately define what they want hence do not undertake precise actions.

Years ago as I started my working life I thought about what the end game was. I decided on a target $$$ amount needed based upon some reasonable assumptions at the time. This precise goal determined certain financial behaviors, evaluated at end of year and throughout my trading life.