August 20, 2026
Filed under: Concentrated Wealth
This month, we’re focused on concentrated wealth: business ownership, real estate, individual stock positions, and company stock. As markets continue to hit all-time highs, it’s tempting to let winning positions ride rather than take a tax hit. But as experienced investors know, the time to think about taking some profits is when a holding is strong, not after it starts to slide.
For business owners and real estate investors, this concentration often runs deeper. The wealth is usually less liquid and harder to diversify, and it’s tied to something familiar: what you built, what you know, what you trust. Behavioral finance offers two useful lenses here:
- Endowment effect: valuing something more highly simply because you own it.
- Overconfidence bias: placing too much faith in your own skill, judgment, or future decisions.
These instincts make sense for anyone who’s built a business or a strong real estate portfolio. They’re also the instincts most likely to work against you down the road. In short, the risks tend to fall into three categories:
- Company risk: shifts within the business or its sector.
- Economic risk: changes in interest rates, the local economy, or industry conditions.
- Liquidity risk: the inability to access cash when you need it.
At Omega, we structure our client fees to support managing your entire wealth and risk picture, including concentrated stock positions, business interests, and real estate holdings. Taking a thoughtful, objective look at these positions can meaningfully reduce the risk in your current situation. That review typically includes:
- Examining actual returns and cash flow over the past three years, rather than relying on long-term historical averages, and confirming that the leadership or business focus behind those returns hasn’t shifted.
- Assessing realistic liquidity options and how easily cash could be raised if needed.
- Analyzing future cash flow needs and the tax considerations tied to the concentrated position.
We’ve seen clients build significant wealth by holding a position for years. We’ve also seen businesses falter, markets decline for extended stretches, jobs disappear, and once-favored companies fall out of favor. Holding a concentrated position can absolutely be the right call, when it’s been thoughtfully assessed and discussed. Be sure to check out Jared Jones’ piece on how we’ve helped clients navigate this, while managing the tax impact along the way.
lisa