Which of the following is a strategy for dealing with concentrated public positions?

The strategy of outright sale is a viable approach for managing concentrated public positions, particularly when an investor finds themselves overly weighted in a single asset or entity that may expose them to significant risk. This decision allows the investor to reduce their concentration in a single security, thereby diversifying their portfolio and potentially stabilizing their overall risk exposure.

Selling part or all of a concentrated position can help mitigate the impact of adverse market movements on an individual security, which is vital in preserving capital. Moreover, this approach enables the investor to redeploy the capital into a wider range of investments, which can enhance the risk-adjusted return of their overall portfolio.

In addition, this option can also allow the investor to manage liquidity needs and rebalance their portfolio to align with their investment goals and risk tolerance. For instance, realizing gains might be necessary to take advantage of new investment opportunities or to fund personal expenses while reducing the risk of a concentrated asset position.

When considering the other strategies, purchasing additional shares increases concentration and risk rather than alleviating them. Holding until market fluctuations stabilize often exposes the investor to prolonged volatility without addressing the risk concentration. Ignoring tax implications can lead to unexpected liabilities, and it would be unwise to disregard these consequences in any investment decision.