ESPP with Walmart (associate stock purchase plan)

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cmoneymillz
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Joined: Thu Mar 02, 2017 8:07 am

ESPP with Walmart (associate stock purchase plan)

Post by cmoneymillz » Wed Oct 11, 2017 12:46 pm

The ESPP, or as Walmart refers to it - ASPP, gives a 15% match up to $1800/yr.

I put in $69 per payperiod (DCA, every 2 weeks) to get the "max" of $270 free dollars per year.

They use conputershare, which charges:
$0.05/share plus $25.50 to sell


My question is how often should I sell?

Ive been adding since April - currently hold 14.5 shares which have done fairly well. Ideally, in typical boglehead fashion, I would like to sell them as soon as I get them to cash out with 15% gains and reallocate the $ into my 3 fund portfolio. However, the steep $25.50 fee is preventing this. Leaning towards cashing out every 6 months or so, but wondering what you all would do in similar circumstances.

MotoTrojan
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Re: ESPP with Walmart (associate stock purchase plan)

Post by MotoTrojan » Wed Oct 11, 2017 1:00 pm

How long do the shares need to stay before sale? 6-months seems reasonable. Could add some market timing spin to it and sell sooner if the stock appreciates past a threshold.

Tamales
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Re: ESPP with Walmart (associate stock purchase plan)

Post by Tamales » Wed Oct 11, 2017 1:11 pm

Seems like way too much work just to get a paltry 270/12= $22.50 per month as a "bonus."
Personally, I'd pass.

ved
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Joined: Sat Jan 18, 2014 6:56 pm

Re: ESPP with Walmart (associate stock purchase plan)

Post by ved » Wed Oct 11, 2017 1:14 pm

Instead of selling at ComputerShare, can you transfer it to another brokerage? My ESPP plan with ComputerShare allows transfer to another brokerage of your choice for free.

So, you could open an account at one of the discount brokerages (TD Ameritrade, or others) and transfer your shares there and sell them.
I think Vanguard fees are $2 per transaction, if you have something like $500k with them. Probably higher if you have less than that.

Obviously, it will take a few days for the transfer to complete, and you will be exposed to your company's stock risk during those days.
I haven't done this myself, but am strongly considering it.

Jack FFR1846
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Re: ESPP with Walmart (associate stock purchase plan)

Post by Jack FFR1846 » Wed Oct 11, 2017 1:15 pm

Do they actually buy shares every pay period or do they buy shares every 6 months? If it's every pay period, I'd pass because I'd want them sold immediately upon purchase and you would lose money doing that. If every 6 months, then sure....stay in it and sell immediately upon purchase. At my work, I can specify "sell upon vesting" and the shares sell miliseconds after they hit my account so I'm guaranteed the gain.
Bogle: Smart Beta is stupid

MotoTrojan
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Joined: Wed Feb 01, 2017 8:39 pm

Re: ESPP with Walmart (associate stock purchase plan)

Post by MotoTrojan » Wed Oct 11, 2017 1:45 pm

Tamales wrote:
Wed Oct 11, 2017 1:11 pm
Seems like way too much work just to get a paltry 270/12= $22.50 per month as a "bonus."
Personally, I'd pass.
It is all relative to salary.

Just saw on MarketWatch that Walmart is up pretty big this week. Maybe time to dump your current holdings :).

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dratkinson
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Location: Centennial CO

Re: ESPP with Walmart (associate stock purchase plan)

Post by dratkinson » Wed Oct 11, 2017 4:07 pm

I have no experience with ESPP and have not studied the issue. That being said....


Would it be beneficial to wait until you've owed each share for one year before selling? In this way you'd pay tax at your LTCGs (long-term capital gains) rate. A few less dollars paid to uncle sugar can only help.

Of course you are then exposed longer to the market. But as long as you are thinking about going this route, buying in a down market is recommended.


Seem to recall the Wiki may have a topic on this. Can search for it.

Recall past ESPP topics on forum. Can search for them.
d.r.a, not dr.a. | I'm a novice investor, you are forewarned.

Nearly A Moose
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Re: ESPP with Walmart (associate stock purchase plan)

Post by Nearly A Moose » Thu Oct 12, 2017 12:02 pm

So you're basically taking the risk that Walmart shares will drop more than 15% before you can sell the ESPP shares, right? Or conversely, that if there is a downturn, you're not able to hold the stock through the recovery and/or the company never recovers.

I think this depends on how large this amount is relative to your overall savings. The total amount of bonus money you can get isn't huge, so if you're saving away $100k a year, it doesn't seem worth the hassle (but you could easily take on the above risk). If you're able to save $5000/yr, the bonus has a much bigger impact, but you're presumably less able to take on the risk. Fun stuff.

Unless you're at one extreme or another, I'd suggest participating up to the match and doing an annual liquidation to minimize the selling costs. Some years you'll make money, some you'll lose, but overall I bet it will turn out pretty much okay, and it will require minimal work on your part. Or, if you're in a try tax bracket where having the earnings taxed at short term gain rates will be painful (n which case you're also probably making a fair amount of income), considering doing an annual one-time lump sum, hold it for one year, and sell as soon as it becomes a long term gain. This is all assuming you aren't able to easily transfer it out like someone mentioned to a discount brokerage (or don't want to bother with that).
Pardon typos, I'm probably using my fat thumbs on a tiny phone.

MotoTrojan
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Re: ESPP with Walmart (associate stock purchase plan)

Post by MotoTrojan » Thu Oct 12, 2017 12:16 pm

dratkinson wrote:
Wed Oct 11, 2017 4:07 pm
I have no experience with ESPP and have not studied the issue. That being said....


Would it be beneficial to wait until you've owed each share for one year before selling? In this way you'd pay tax at your LTCGs (long-term capital gains) rate. A few less dollars paid to uncle sugar can only help.

Of course you are then exposed longer to the market. But as long as you are thinking about going this route, buying in a down market is recommended.


Seem to recall the Wiki may have a topic on this. Can search for it.

Recall past ESPP topics on forum. Can search for them.
The 15% gain shouldn't be taxable by you at-least, so take it a run.

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