The 3 Biggest, Most Common Mistakes We See With Equity Compensation
Over the past year, we've seen a noticeable increase in people coming to us with questions about equity compensation.
Some are approaching major liquidity events. Others are navigating RSU vesting for the first time. A few are realizing, a little too late, that taxes and concentrated stock positions can create real problems.
The same mistakes show up again and again — across industries, job titles, and company sizes. The good news is that many of the most common issues are preventable.
Market Perspective: Liberation Day
• Sweeping Import Tariffs Implemented – Beginning April 5, a 10% universal tariff will apply to all imported goods, with an additional tariff for countries running a trade deficit with the U.S. starting April 7. This move signals a broad protectionist shift in U.S. trade policy
• Existing Tariffs Remain Intact – The new tariffs do not replace prior trade restrictions, such as the 2018 China tariffs, compounding the overall cost of imports for businesses and consumers.
• Key Exemptions for North America & Select Sectors – Canada, Mexico, and certain industries (e.g., pharmaceuticals, autos) are exempt.
• Historic Economic Impact – If fully implemented, these tariffs would increase the U.S. effective tariff rate from 2% to 20%, generating ~$640 billion in revenue, comparable to doubling corporate tax revenue. If we called a tariff a tax, this would represent the largest tax increase in modern U.S. history.
March 2025 Market Update
• U.S. Equity Selloff – The S&P 500 fell -5.6% in March and -4.3% for the quarter, its worst since 2022, as stretched valuations and concentrated leadership fueled volatility.
• Mag Drag – Despite 61% of securities posting returns better than the index, AI concerns and a selloff in high-valuation stocks pulled down the market. Six of the “Magnificent 7” fell between -11% to -36%, underperforming the S&P 500.
• Global Rotation to Stability – Investors shifted away from U.S. equities, favoring Europe and China. MSCI EAFE outperformed the S&P 500 by 11% for the quarter, its strongest lead since Q2 2002, while China gained 15% on stronger manufacturing data and renewed policy efforts.
• Growth Scare – The Federal Reserve is expected to hold rates, while fiscal policy tightens. Tepid consumer spending and declining confidence add to economic growth concerns.
February 2025 Market Update
• Growth Scare Hits Risk Assets – Weaker economic data, a patient Fed and shifting policy dynamics fueled slowdown fears triggering a broad selloff of U.S. equities, with defensive sectors outperforming.
• Growth Puts Spotlight on Valuations – High-valuation stocks fell more than peers, while value and defensive sectors led. Consumer staples outperformed consumer discretionary by 11%, while Treasuries rallied amid shifting markets sentiment.
• International Extends its Lead – EAFE took another step forward and added to its 2025 lead over the S&P 500, led by EU financial and defense spending along with a cooling of U.S. high valuation stocks.
March 2025 Investment Review & Outlook (Video)
Markets have started 2025 on uneven footing — gold and international stocks are soaring, while U.S. tech has stumbled. In this surprise mid-quarter update, Ben Hockema breaks down what’s driving the shift, how a weaker dollar and stronger bond yields shape the outlook, and why diversification continues to work for long-term investors.
2025 Market Outlook (Video)
Ben Hockema reviews the 2024 performance and looks ahead to 2025, including:
2024 Investment Performance
4 Reasons to be Bearish
4 Reasons to be Bullish
How to Position Portfolios for 2025 and beyond
2025 Market Outlook
Markets stand at a fascinating crossroads. While opportunities and optimism remain, the path forward for allocations is anything but straightforward. This year, our outlook centers on three pivotal themes: fragility, durability and the age of alpha.
October 2024 Market Update
• Despite a Federal Reserve rate cut in September, rising inflation concerns and a cooling labor market overshadowed optimism, leading to a cautious market environment in October.
• While October brought challenges, year-to-date returns remain strong, highlighting underlying market resilience despite the month’s turbulence.
• The path to normalized inflation may not be linear, strengthening the case for resilient portfolios in preparation for the road ahead.