Tech workers whose compensation includes a stock award may have seen an increase in their net worth due to the sustained rally in tech stocks this year. But if they withdraw money too soon, they can get caught up in unwanted tax consequences and miss out on future earnings.

The Nasdaq Composite index has gained more than 20% this year, led by tech giants like Apple (AAPL), Alphabet (GOOGLE), Metaplatforms (GOAL) and, most notably, AI chip maker Nvidia (NVDA), which is up 170% this year and reportedly minted millionaires among its employee ranks.

investopedia spoke with David Amann, a former technology employee and now financial advisor at Edwards Jones who works with clients who have stock-based compensation, to find out how workers can navigate market volatility, discover diversification, and what mistakes to avoid when dealing with stock options.

Here is an edited excerpt from that conversation.

INVESTOPEDIA: Do you know millionaire people in the world? stock compensation they have? What are some of the mistakes you make when making money so quickly?

Personally, before I was a financial advisor, I worked for Netscape right when it went public in 1995. I got a front-row seat to see what can happen when some key guidelines are not followed, such as diversification and make sure you fully understand your stock compensation.

When I was at Netscape, stock compensation seemed like a lottery ticket: I didn’t consider it part of my long-term strategy. I was sure I would retire on some Greek island.

INVESTOPEDIA: What were some of the tax mistakes you made?

When it comes to stock-based compensation, I believe it is very important to work with a tax professional; I certainly would like to do so.

Some types of stock compensation, such as incentive stock options or a employer stock purchase plan—can give you tax benefits if you hold them for certain periods of time. Others, like restricted stock units (RSUs) or non-qualified stock options, do not necessarily come with the same benefits. It can get really complicated.

That being said, I don’t think people should let the tax tail wag the dog here. I’ve seen too many people focus solely on the tax benefits of their stock compensation and forget about other critical factors, such as diversification or the volatility of the underlying stock.

INVESTOPEDIA: For clients who have a large portion of their compensation in stock options and there is volatility in the market, what kind of advice do you give them?

When I think about employer stock compensation, it’s about using those assets to achieve some meaningful long-term financial goals, like (saving for) your child’s education or paying property taxes.

When we think about buying or selling stock options, we first want to think about that (long-term) strategy. Whether or not people should buy or sell will depend on what (someone’s) goals are and what they are trying to achieve.

INVESTOPEDIA: In general, how much of people’s portfolios should they have allocated to your company’s stock?

You should always remember that you are not only investing in the shares of your own company, but you also receive your salary from that company.

At Edward Jones, we generally have a rule of thumb that no one should have more than 5% of their net worth investable in a single investment. When considering stock-based compensation, you may even want less compensation than that. If your company is going through tough times, not only will your stock-based compensation be worth less, but there is also the possibility of layoffs, which will affect your employment situation.