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The company has been happy with my performance these years, and I received RSU which started investing. I have never owned stocks before: even though the company is US-based, I'm not a US resident and I'm probably much more ignorant about the financial market than the average US employee. However, now I own stocks, thus I guess I cannot postpone learning the basics of stock management anymore. My main doubt is whether to keep these stocks after they vested, or to sell them. What should I look at, in order to make an informed choice?

Firstly, if I understand correctly, in order to make hold/sell decisions I should not look at the trend (performance?) of the stock with time, but at the return. This begs the question of what a return is. Since apparently, RSU don't grant dividend rights, the return should be the difference between the stock price when it vested, and the value today. Correct? PS before you ask, I did look for a definition of returns on this site, but I found this which clearly is not what I'm looking for (I didn't pay anything for my RSU, thus this ROI quantity cannot be computed).

Secondly, again if I'm not wrong, stock returns should be judged over a time frame of 10 or more years, not months or 1-2 years. In other words, if my first RSU batch vested two years ago, and now the stock price is lower than in 2017, this is not sufficient reason to keep. Equivalently, if the stock price is higher, this is not sufficient reason to sell. Is this correct?

Finally, does it make sense to look at these things? Or should I just sell everything as soon as it vests, and use the money to pay someone (a fund? a broker? I have no idea, I guess I should ask a new question then) to invest that money in a "diversified portfolio"? The rationale behind this choice would be that since I know very little about stocks, I don't have the means to make an informed decision on whether to keep them or not, and thus I should just pay a professional to take that decision for me. I'm located in Southern Europe, if that helps.

EDIT: the company is partly privately held, partly publicly traded, with a ratio between the two ownerships which may change later this year. If the exact ratio is of importance, I can close the question and reopen it later this year.

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    Are the RSUs stock in a publicly traded company or in a privately held company? It makes a huge difference.
    – David Schwartz
    Jun 24, 2019 at 2:25
  • @DavidSchwartz good point. I'll edit the question accordingly.
    – DeltaIV
    Jun 24, 2019 at 10:01
  • Unless the RSU is much lower than the market value, otherwise there is no point getting it than purchase it from the market directly (if the company is indeed profitable). FYI, a badly managed company will remain bad no matter how long you keep the stock. Holding stock is only true for a company with a better prospect. If you happen to be able to tap into US stocks market, it is no brainer to invest in low cost index funds like Vanguard for a long shot.
    – mootmoot
    Jun 24, 2019 at 11:44
  • @mootmoot what do you mean by "lower than the market value"? I paid literally nothing to get these RSU - they are a bonus. I didn't choose to receive part of my salary as stock options - this is on top of my base salary and other monetary bonuses.
    – DeltaIV
    Jun 24, 2019 at 12:55
  • @mootmoot anyway, if I understand correctly, your suggestion is "sell all the RSUs as soon as they vest, and use the money to invest in low cost index funds". Correct? Thanks!
    – DeltaIV
    Jun 24, 2019 at 12:58

1 Answer 1

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For starters, is the RSU already transferrable? As for your questions in regards to the movement of the stock over time, results can vary. If the stock is stable, then yes, over its lifetime it should be positive and should have a relatively standard upward trend. However, with that being said, if your knowledge of financial markets is limited, you're better off putting your money into a well-diversified index fund such as the S&P 500, or for a lower barrier of entry, shares of an index-weighted ETF such as SPY.

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  • What do you mean by transferrable? Every year, I receive part of the RSUs through a vesting plan. I can go on a website and choose to sell the already vested RSUs. In this case the corresponding value (minus taxes) will be transferred to my bank account. Is this what you mean?
    – DeltaIV
    Jun 24, 2019 at 12:53
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    @DeltaIV I'm pretty sure that's what he meant. Often, RSUs in companies that are not publicly traded cannot easily be sold or transferred even after they vest.
    – David Schwartz
    Jun 25, 2019 at 0:34

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