Your Employer Stock Is Down—Now What? (An EMN/Eastman Example)
When your employer’s stock drops, it can hit twice: your portfolio and your peace of mind.
It’s stressful, it feels personal, and it often triggers the same question:
“Should I hang on, buy more, or start selling?”
In this post, I’m not going to tell you whether Eastman Chemical (EMN) is cheap or expensive, or where it’s headed next.
Instead, I’ll walk through the bigger planning question:
How much of your financial future do you really want riding on a single company—especially your employer?
Eastman is a useful example because many employees and retirees have EMN exposure through the Eastman Investment & Employee Stock Ownership Plan (401(k)/ESOP), RSUs, employee purchase programs, and shares accumulated over time. But the framework below applies to anyone holding meaningful employer stock.
The Real Issue Isn’t the Stock Price. It’s Concentration Risk.
When your employer’s stock drops, familiarity can make the stock feel safer than it is. You know the company. You see the products. You might even know leaders personally.
But from a planning standpoint, employer stock has a double-whammy risk:
Your paycheck and benefits depend on the company.
Your portfolio may depend on the same company.
If things go wrong at the wrong time, both can be hit together. That’s concentration risk in a nutshell: too much of your net worth tied to one company, one industry, or one local economy.
A quick illustration of why this matters:
If EMN is 30% of your investable assets and EMN falls 50%, your overall portfolio drops about 15% from EMN alone—before anything else moves.
That may be an acceptable risk for some people. For others—especially those nearing retirement or planning an early retirement “bridge”—it’s a plan-breaker.
Why This Feels Extra Hard: Price Anchoring
Even when you understand concentration risk, it can still be emotionally tough to act. One common reason is price anchoring.
If you remember EMN at much higher prices, today’s price doesn’t feel like “today’s price.” It feels like “down from where it should be.”
That anchor can cause two problems:
You treat the old high as “normal,” even though markets don’t care what the price used to be.
Selling below that anchor can feel like “locking in” a mistake—so you postpone decisions that would reduce risk.
From a planning standpoint, what matters isn’t the past price. It’s this:
How concentrated are you today?
How would another big drop change your ability to retire on your timeline?
If your current position is too risky for your goals, the fact that it “used to be higher” isn’t a good reason to keep the risk.
Quick Gut Check: How Did the Drop Feel?
Before you crunch numbers, check your reaction:
Did this drop make you lose sleep?
Did you find yourself checking accounts multiple times a day?
Did you think, “If this falls more, I’m going to panic”?
If “yes,” that may be a sign that your actual risk and your tolerance for risk are out of alignment. A healthy portfolio is one you can stick with through ugly headlines—without feeling forced into panic decisions.
Step 1: Map Your Employer-Stock Exposure
For Eastman employees and retirees, EMN exposure can show up in more places than you think. Do a quick inventory:
Inside the 401(k)/ESOP
How many shares of EMN do you hold?
What’s the current value?
Other accounts
Any EMN in IRAs, a brokerage account, an ESPP, or an old employer plan?
Future EMN you’re likely to receive
Ongoing RSUs or employee stock purchase contributions?
Are dividends being automatically reinvested into EMN?
Add it all up and compare it to your total investable net worth (401(k)s, IRAs, brokerage, HSA investments, etc.). It’s common for employees to discover that 20%, 30%, or even 50%+ of their investments are tied to one company after doing a full inventory.
Step 2: Pick a Target (So This Becomes a Math Problem)
There isn’t one “right” number for everyone, but a common rule of thumb is:
Keep any single stock under ~5–10% of investable assets.
For employer stock, many people choose the low end of that range because your career is already tied to the company.
Your target might look like:
“I’m okay with EMN being up to 10% of my investments.”
“Over the next few years, I’d like to move closer to 5%, especially as I approach retirement.”
The point isn’t perfection overnight. The point is that a clear target turns an emotional debate into a simple plan.
Step 3: Build a De-Risking Plan (Without Panic-Selling)
Once you have a target, you need a method. Here are three common approaches.
Option A: Let New Money Do the Work
If you’re still contributing heavily:
Direct new contributions into diversified funds instead of more EMN.
Turn off dividend reinvestment into EMN and redirect dividends into diversified funds.
This gradually shrinks EMN as a percentage of the portfolio—especially if you’re still saving aggressively.
This often makes sense if:
You’re earlier in your career, and
EMN isn’t an extreme share of your net worth yet.
Option B: Sell Down on a Schedule (Rules-Based, Not Feelings-Based)
If the position is already large—or you’re closer to retirement—a schedule can help:
Decide how much you want to reduce each quarter or year.
Put it on a calendar and follow it regardless of headlines.
Example:
“I’ll sell $10,000 of EMN each quarter for the next three years and reinvest into a diversified mix of stock and bond funds.”
The benefit is consistency. You’re not waiting for the “right time,” which is often another form of anchoring.
Option C: Set a “No-Regrets” Threshold
Ask this:
If the stock dropped another 50% from here, would I still say, “I understood the risk and I was okay with it”?
If the honest answer is “no,” the position is likely too big.
Important Real-World Constraints (Don’t Skip This)
Before you act, remember:
Your 401(k)/ESOP may have specific rules about company stock and diversification elections.
If you’re subject to blackout periods, trading windows, or insider restrictions, planning ahead matters.
The right de-risking plan should fit both your financial plan and the rules you’re operating under.
Step 4: Where the Shares Are Held Changes Everything (Taxes Matter)
Your strategy may be very different depending on location:
Inside a 401(k)/ESOP
Shifting from EMN to other funds inside the plan typically doesn’t create immediate taxes.
Inside an IRA
Similar story: you can usually sell and reinvest without a tax bill today.
In a taxable brokerage account
Selling may trigger capital gains taxes.
Long-term gains (held >1 year) are generally taxed more favorably than short-term, but it’s still real money.
If you have large unrealized gains in taxable accounts, you might:
Spread sales over multiple years,
Coordinate sales with lower-income years,
Use losses elsewhere to offset gains (tax-loss harvesting).
And if you’re nearing retirement or considering moving employer stock out of a plan, NUA (Net Unrealized Appreciation) rules can be valuable—but mistakes can also be costly and sometimes irreversible. This is a situation where personalized tax planning is worth it.
Step 5: Tie This Back to Your Bigger Plan (FI / Early Retirement)
Employer stock concentration matters most when it intersects with your timeline.
Ask:
“Can I retire at 55 instead of 65?”
“How do I bridge the gap between my last paycheck and Social Security?”
“What happens if this stock stays flat for 10 years… drops further… or rebounds?”
Concentration can amplify outcomes:
Big upside if the stock performs well, and
Big downside right when withdrawals begin and sequence-of-returns risk matters most.
A general pattern:
30s/early 40s: a meaningful employer stock position might be manageable if the rest of the plan is diversified and savings are strong.
50s/early 60s: a large employer-stock position can be the difference between a smooth “bridge” and needing to delay retirement or return to work after a rough stretch.
The One Question That Cuts Through the Noise
Headlines will change. Analyst opinions will shift. The stock will move.
The question that doesn’t change is:
If I were starting fresh today, would I choose to put this much of my net worth into my employer’s stock?
If the honest answer is “no,” the follow-up becomes practical:
What’s a realistic plan to move from where I am to where I’d actually be comfortable?
Usually that means:
Set a target,
Build a written de-risking plan,
Follow it consistently through whatever the stock does next.
A Closing Thought
Owning some employer stock can absolutely make sense. For Eastman employees, company stock is part of how the retirement plan is designed, and it’s natural to want to participate in the company’s success.
The problem usually isn’t owning EMN.
It’s owning too much of it without a plan.
A quick 10-minute action checklist
Find your total EMN across all accounts
Compute EMN as a % of investable net worth
Choose a target range (ex: 5–10%)
Pick a de-risking method (new money vs schedule)
Confirm account type + tax impact before selling
If you’re an Eastman employee or retiree and you’re not sure what “too much” looks like for your situation—especially if you’re planning early retirement or building a bridge to Social Security—this is exactly the type of decision I help people work through: quantify the exposure, stress-test the plan, and build a rules-based approach you can stick with.
Disclaimer: This post is for general educational purposes only and is not investment, tax, or legal advice. It is not a recommendation to buy, sell, or hold Eastman Chemical (EMN) or any other security. Your situation is unique—consider talking with a qualified professional before making major changes to your portfolio.
Meet Your Guide
Hi, I’m Josh Short, a CERTIFIED FINANCIAL PLANNER® professional and founder of OptimalPath Advisors. With over 20 years in financial services, I help DIY investors and FI-minded professionals build clear, flexible plans—using flat-fee, commission-free advice.
Want Help Creating a Plan (Without Guessing the Market)?
When employer stock becomes a big piece of your net worth, the hardest part isn’t picking the “perfect” time to sell—it’s building a rules-based plan that fits your goals and tax situation.
I help clients:
Measure employer stock exposure across retirement plans, brokerage accounts, and stock comp
Set a reasonable concentration target (so decisions become math, not emotion)
Build a de-risking plan (new money, scheduled sales, tax-aware strategy)
Stress-test an early retirement plan (including bridge-to-Social-Security years)
I work with clients locally in East TN and virtually across the U.S.
If you’d like help building a clear plan for your situation, you can schedule a free 30-minute intro call here:
https://calendly.com/josh-optimalpathadvisors/30min
