Eric’s Journey: How Cache Helped Protect Wealth as the Market Turned

Stock compensation has become one of the most powerful engines of wealth creation in corporate America. It lets employees participate in the upside of the companies they help build—and if the company is successful, that upside can be exponential.

But what starts as a reward can quickly become a risk.

As those shares grow in value, so does your overall exposure. And when much of your net worth is tied to one company, you carry substantial concentration risk. Left unmanaged, that risk could be a ticking time bomb.

We’ve met hundreds of employees at companies like Nvidia and Tesla who’ve experienced both sides of this coin over the years. Their shares have appreciated quickly and become a majority of their net worth. Selling to diversify would trigger massive capital gains taxes, so doing nothing is the easy route. But that leaves them exposed to the volatility of the stock price. A change in market sentiment can erase years of growth in their portfolio.

That’s exactly the situation Eric, a long-time Tesla employee, found himself in during late 2024. His stock had skyrocketed. So had his concentration. The question wasn’t whether to act—but how to do it without losing a third of his gains to taxes.

Cache helped him do just that.

This is the story of how Eric avoided a $388k upfront tax bill—and positioned himself to withstand a 50% drop in Tesla stock. Today, he’s ahead by over $278K compared to doing nothing or selling outright.

Riding the Tesla Rollercoaster

Eric had been fortunate. His net worth had grown meaningfully over the years—almost entirely through his Tesla shares. While this created life-changing wealth, he recognized the risk of betting much of his financial future on Tesla alone. He decided that he’d like to diversify. 

Selling wasn’t attractive. His shares had appreciated more than 10x, and a sale would have triggered massive capital gains taxes, leaving him with a much smaller base to reinvest.

That’s when he found Cache.

Between November 2024 and March 2025, Eric contributed $1.12M of Tesla stock into Cache’s flagship Exchange Fund, UNIX. He diversified gradually by participating in seven separate Cache Exchange Fund closes over a few months. Dollar-cost averaging (through multiple contributions over time at different share prices) helped him reduce risk in a measured way. This allowed him to defer gains, keeping his full principal working in the market and positioning himself for reduced risk.

Here’s how that compares to a traditional “sell and reinvest” approach:

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But did Eric make the right decision to diversify? The true benefit of that decision would become clear as the markets turned volatile.

What happened next

Eric’s first contribution came in November, when Tesla traded at $320. By December, the stock had surged to $485. It would’ve been easy to hesitate. But Eric stayed disciplined and continued to diversify across multiple closes.

Then, in early 2025, the momentum reversed sharply.

Between December and April, Tesla fell 53%—from $485 to $221.

By March 2025, broader economic uncertainty—driven largely by newly announced tariffs—had dragged down the entire market. Diversified portfolios felt the pullback too—but the impact was far smaller. Eric’s holdings in the Cache Exchange Fund were down 9.97% ($111K). Compared to the 34.6% decline ($389K), he would have faced holding Tesla directly.

Takeaways:

• Eric’s decision to diversify with the Cache Exchange Fund preserved $278K in value compared to holding Tesla stock directly—despite a turbulent market.
• If Eric had sold his stocks and reinvested into a Nasdaq-100 Index fund, his post-tax starting point would have been smaller. His portfolio would still trail his Cache holdings by more than $350K.

Lesson 1: You can’t predict your company’s future

When Eric started diversifying in November 2024, Tesla was climbing fast. Investor sentiment was euphoric, and many believed the stock still had plenty of room to run. For a moment, it looked like he’d diversified too early—Tesla continued to rally after his first contributions to Cache.

But markets don’t reward perfect timing. They reward discipline.

By the time Tesla had fallen more than 50% just a few months later, Eric’s decision looked prescient. He hadn’t tried to call the top. He just acted prudently, consistently, and early enough to avoid the worst of the drawdown.

Takeaway: Concentrated exposure can build wealth but is often a liability. Diversification is about protecting yourself from the parts you can’t see coming.

Lesson 2: Tax efficiency can be your secret superpower

For many investors we meet, taxes are the biggest obstacle to diversification. Selling a large stock position often means giving up a third of your gains in one go. That’s enough to keep most people sitting tight.

Eric faced the same dilemma. A traditional sale of his Tesla shares would have triggered over $388,000 in capital gains taxes, instantly reducing his investable capital by more than  35%.

Instead, he contributed those shares to the Cache Exchange Fund and deferred the tax entirely. That allowed him to keep his full $1.12M working in the market—giving him more capital, more exposure to growth, and more downside protection during a volatile stretch.

Without that option, Eric might have stayed concentrated and paid the price when Tesla dropped.

Takeaway: Keeping more of your capital working isn’t just efficient—it gives you a significant advantage.

Lesson 3: Diversification isn’t a strategy—it’s your financial safety net

The benefits of diversification are often only apparent in hindsight.

In Eric’s case, when Tesla reversed sharply, Eric’s diversified portfolio held its ground. That difference preserved nearly $278,000 of Eric’s wealth in just a few months.

Takeaway: Think of diversification as a safeguard for single-stock risk. It can dramatically soften the blow when things go wrong.

Lesson 4: Diversification doesn’t mean all-or-nothing

Eric didn’t need to go all in on diversification. When he first discovered Cache, he held more than $5 million in Tesla stock. Even now, he continues to hold a significant position.

He believes in the company. But he also believes in managing risk.

Cache’s structure made it easy to diversify gradually. With low minimums and bi-weekly closes, Eric was able to dollar-cost-average his exit—reducing exposure over time without having to make an all-or-nothing decision.

Takeaway: You don’t need to abandon your conviction to act prudently. Diversification can be incremental. With the tools at Cache, it can also be seamless.

Lesson 5: Diversification is a strategy for all markets

Eric made his most recent contribution to Cache in March 2025 after Tesla had already fallen 46% from its peak. Many investors might have hesitated, hoping for a rebound before taking action. But Eric understood something critical: just because a stock is down doesn’t mean the risk is gone. Eric stayed the course—proactively reducing risk instead of gambling on a recovery.

In fact, risk often increases after a drop. Still, investors tend to anchor to prior highs, waiting for the stock to “come back” before they act. But markets don’t move according to personal anchor points. While you wait, the market could race ahead, depriving you of a favorable entry point.

Diversifying after a decline may feel like locking in losses. But more often, it’s a way to avoid locking in even larger ones. Don’t try to catch a falling knife.

Takeaway: In volatile markets, diversification is about protecting what you have. Markets eventually recover, but there’s no guarantee that any stock will.

Final thoughts: Protecting wealth is as important as creating it

Eric’s story demonstrates what smarter diversification with the Cache Exchange Fund looks like in real life – particularly in volatile markets. He didn’t merely avoid major losses; he deferred a $388K tax bill and preserved $278K in value during a sharp market drop.

Most investors fixate on the hypothetical upside of the stocks they are holding. But Eric’s story poses more important questions:

What if your stock fell 50% tomorrow? What would you wish you had done today?

More than diversification, Cache helps you take control of your risk, protect what you’ve built, and stay positioned for growth—no matter the market. Take the first step toward long-term resilience. See if you’re a match >

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