One stock shouldn't decide
your whole net worth.
Years of RSU vesting, an early-employee equity stake, or a single winner can quietly leave one position driving your entire financial outcome. Formation frames that concentration as an outcome — what a real drawdown would do to your net worth — and pairs it with the tax cost of trimming, so the decision is informed instead of avoided.
The short answer
Concentration risk is the outsized exposure that comes from one holding — often employer stock — dominating your portfolio. Formation measures it as an outcome (what a 30–50% drop would do to your net worth), surfaces the cost basis behind the position, and pairs trimming with cross-custodian, wash-sale-aware loss harvesting.
Why concentration is easy to ignore
A concentrated position is easy to understate while the stock has only gone up, and a flat percentage — '38% in one name' — doesn't feel like a decision. Meanwhile the position is often low-basis, so trimming triggers a capital-gains bill that makes inaction the path of least resistance. The result is a household whose entire financial outcome rides on a single company, with no clear read on the risk or the cost of reducing it.
How Formation handles it
Concentration as an outcome, not a percentage
Formation translates the position into the dollar and percentage hit to your whole net worth under a real drawdown — 'a 50% drop here costs you X' — the framing that turns an abstract weight into a decision.
The tax cost of trimming, in view
Cost basis across custodians sits beside the position, so the capital-gains consequence of selling a slice is explicit — the other half of the risk-versus-cost trade-off most tools leave out.
Wash-sale-aware harvesting to offset
When you do trim, Formation scans the unified feed across every custodian for losses to offset the gain — and flags wash-sale risk so the offset you book is one you actually keep.
Aware of how concentration is made
RSUs, ISOs, NSOs, and ESPP shares quietly manufacture single-company exposure. Formation tracks the equity comp feeding the position, so concentration is something you watch accumulate rather than discover.
Risk and cost, on the same screen
Diversifying is a trade-off. See both sides of it.
The reason concentrated positions linger is that the risk lives in one place and the tax cost in another. Formation puts them on the same screen — the drawdown exposure and the basis-driven tax bill — so you and your advisor can size a staged exit instead of defaulting to inaction.
See what one stock is really doing to your net worth.
Connect your accounts and watch concentration resolve as an outcome — with the tax cost of trimming and wash-sale-aware harvesting beside it.
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Methodology · Exposure is CALC from SRC position values; the drawdown impact is EST against a hypothetical decline you choose — not a Formation prediction or recommendation. Tax cost is EST against your basis and rate. Formation does not execute; your trades stay yours to run with your advisor.
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