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49

This seems to me irregular both in terms of risk, lack of diversification Me too. Is this a suitable allocation of assets? Putting 50% in one stock is acceptable, I think, if that one stock is a highly diversified and well-run investment company like Berkshire-Hathaway. (Apparently, half of Bill Gates' wealth is in B-H.) Of course, a giant bank isn't ...


9

Yes, this is terrible in terms of lack of diversification and concentrated risk. Conflict of interest? No, because there's no benefit to Morgan Stanley if a client owns shares of JPM. Mismanagement? Maybe, maybe not. This might be a violation of FINRA's "Know Your Client Rule" which requires a broker to assess each customer's financial situation, ...


5

Given the capital gains basis on the stock, it would be practical for her to continue to hold it. It is potentially possible that JPM grow so much over the past 10 years that it went from a moderately weighted position (10-15%) to 50% and was not sold for tax reasons. With that in mind it is hard to tell if this is mismanagement as the adviser could be ...


2

(Short term -- less than a year or two -- money should be in savings account.) The purpose of keeping the money in a conservative portfolio is so that you don't have to sell low. Here's an example: $25K is 31.25% of the $80K in your investment accounts. If the market drops 50% like it did 12 years ago, you'd have $40K remaining. $25K is 62.5% of $40K. ...


1

There is the question of what your mother's tax bracket is. If it's low, you might want to slowly rebalance the portfolio, i.e., sell a small portion of the JPM each year. This will generate a tax hit, with the offsetting benefit that you will be increasing the diversification of her portfolio. Don't forget that these are long term capital gains we're ...


1

Is this a suitable allocation of assets? All allocation of assets are of course up to the investor, the risks they are willing to take and the companies they want to support. To me it looks like borderline mismanagement, but I'm willing to be convinced otherwise. This is definitely strange, but large corporations are fairly stable. And $3.5M is a lot. ...


1

I'm 62, getting ready for retirement, and in a similar situation. I worked for a dozen years at Microsoft, purchasing ESPP, getting stock grants, etc. My stay there nearly exactly coincided with Steve Ballmer's turn at CEO. During that time (except a large drop right after I started and a dip/recovery in 2008-2009), the stock remained completely flat. ...


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