What is liquidating stock
When you look at your stock portfolio, make note of the number of shares you own of each company's stock and their current value.
If you own a large number of shares or if the share value has appreciated significantly, you should work with a stockbroker to liquidate your portfolio for a number of reasons.
For example, you may be taxed on capital gains or lose the portfolio's future appreciation.
A liquidation specialist at a brokerage firm can help you anticipate the tax consequences of the portfolio liquidation and advise you about an approach that will maximize the return on your investment.
For example, to sell your shares at the best market price, you should avoid moving a large number of shares into the market at one time, which will cause the stock price to decline.
In addition, if your shares don't trade frequently or the shares were issued by a private company, get advice about liquidating your portfolio from one or more brokers.
Contact the investor relations department of the company that issued your stock to see if a share buyback program is in place.
A share buyback program enables a company to buy shares back from its investors.
Liquidating any stock holding, particularly a large stock portfolio, is a serious undertaking.
Evaluate the holdings you wish to liquidate in terms of their share size, market price and liquidity.
A large number of shares or a high market price on your stock are reasons to ask a stockbroker for assistance moving the shares into the market.
A variety of reasons may induce the investor to do this, but the most common one is simply a belief that the security price will fall.
Whenever you liquidate a small portfolio or convert the stock to cash, it has financial consequences.