July 2026
Featuring
Chris Galeski, Wealth Advisor and Partner, Morton Wealth
Meghan Pinchuk, Chief Investment Officer and Partner, Morton Wealth
It is a simple question. And for most investors holding concentrated stock positions, the honest answer is no.
On this week's Financial Commute, Chris Galeski and Chief Investment Officer Meghan Pinchuk walk through why the answer is almost always taxes, why letting the tax decision drive the investment decision is a risk in itself, and what the after-tax value of a highly appreciated position actually looks like when you do the math.
They also cover the middle path most investors do not consider: trimming gradually, staying in favorable long term capital gains treatment, and using the rebalancing process to reduce concentration without triggering a single large tax event.
If you are holding something you would not buy at today's price, this one is worth eight minutes.
0:00 – Cold open: if I gave you the million dollars today, would you buy it?
0:39 – Welcome and today's topic: why people hold onto appreciated stock
1:13 – The real reason: nobody wants to pay taxes
1:36 – The tax tail wagging the dog
2:44 – How Morton thinks about taxes when managing client portfolios
3:55 – Your IRA balance isn't your real balance: factoring in what you actually keep
4:33 – Three ways to handle a big tax bill: donate, hold, or pass it on
5:52 – Does it have to be all or nothing? The case for trimming over time
6:08 – A practical rule: realizing up to $50K in long term capital gains per year
7:16 – Closing takeaway: ask yourself if you'd buy it today, and go from there
If I wouldn't buy my stock at today's price, should I sell it?
Not necessarily all at once, but the question is worth taking seriously. If your honest answer is that you would not repurchase the position at its current price, that is a signal that your reason for holding is inertia or tax avoidance rather than conviction. The right next step is to figure out the after-tax value of the position, assess how much concentration risk it represents in your overall portfolio, and explore whether a gradual trimming strategy makes more sense than holding or selling everything at once.
Why do people hold stocks they know they should sell?
Almost always taxes. Selling a position that has grown significantly triggers a capital gains event, and the reluctance to hand that bill to the IRS keeps investors in positions well past the point where they would choose to hold them. The problem is that this logic inverts the decision-making process. The investment question should come first. The tax question should shape how and when you execute the answer, not whether you act at all.
What is "the tax tail wagging the dog?"
It is a phrase used in investing to describe the situation where the desire to avoid taxes becomes the primary reason for an investment decision, overriding what the investor would otherwise choose to do based on the merits of the position. Chris and Meghan both describe this as one of the most common behavioral patterns they see in client portfolios, particularly with company stock or other highly appreciated holdings.
Does tax loss harvesting actually eliminate taxes on gains?
No. The most accurate way to describe it is deferral. Tax loss harvesting uses realized losses to offset realized gains, reducing the current year's tax bill. But those losses are finite, and the gains do not go away permanently. Some strategies in this space are more useful than others, and Meghan notes that some are better marketing than math. Before relying on any of these strategies, it is worth understanding whether you are actually reducing a tax burden or simply moving it forward in time.
What is the real after-tax value of my investment portfolio?
If your portfolio includes positions with significant embedded gains, the account balance you see is not the same as what you could actually spend. A $2 million position with a low cost basis carries a meaningful tax liability that, once netted out, might leave you with $1.4 or $1.5 million in real spending power. Chris and Meghan suggest applying this same kind of net thinking to stock holdings that investors often view at face value, particularly when comparing them to other assets in the portfolio.
How much of a gain should I realize from my taxable account each year?
Chris describes a practical guideline of realizing approximately 5 percent of a taxable account's value in long term capital gains annually. On a $1 million taxable account that would be around $50,000 in realized gains per year. Long term capital gains rates are generally more favorable than ordinary income or short term capital gains rates, so staying within a disciplined pace of realization allows the investor to rebalance and reduce concentration without triggering a larger tax event.
The discomfort around capital gains taxes is real, but it becomes a problem when it stops investors from making decisions that are actually in their best interest. Understanding what you own, what it is worth after taxes, and what your real options are is the foundation of managing a concentrated position well.
At Morton Wealth, these conversations start with the investment question first and the tax question second. If you are holding something you would not buy today, that is worth a conversation.
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Disclosures: Information presented herein is for discussion and illustrative purposes only and is not intended to constitute financial advice. The views and opinions expressed by the speakers are as of the date of the recording and are subject to change. These views are not intended as a recommendation to buy or sell any securities, and should not be relied on as financial, tax, or legal advice. You should consult with your finance professional, accountant, or tax professional before implementing any transactions or strategies concerning your finances.
