Comments on: You're an Idiot for Putting Your Retirement Money Into the Same Company You Work For http://cody.blogs.foxbusiness.com/2008/08/29/youre-an-idiot-for-putting-your-retirement-money-into-the-same-company-you-work-for/ Fri, 20 Nov 2009 19:19:20 -0500 http://wordpress.org/?v=2.8.5.2 hourly 1 By: monkeyfurball http://cody.blogs.foxbusiness.com/2008/08/29/youre-an-idiot-for-putting-your-retirement-money-into-the-same-company-you-work-for/comment-page-1/#comment-1403 monkeyfurball Thu, 04 Sep 2008 17:39:52 +0000 http://cody.blogs.foxbusiness.com/?p=367#comment-1403 Your an idiot for calling people idiots. Your an idiot for calling people idiots.

]]> By: Annemarie http://cody.blogs.foxbusiness.com/2008/08/29/youre-an-idiot-for-putting-your-retirement-money-into-the-same-company-you-work-for/comment-page-1/#comment-1399 Annemarie Thu, 04 Sep 2008 03:05:26 +0000 http://cody.blogs.foxbusiness.com/?p=367#comment-1399 Most company's protect thier employees and do not allow you to invest more than 10% of your portfolio in the company stock to protect the employee from potential losses. Most company’s protect thier employees and do not allow you to invest more than 10% of your portfolio in the company stock to protect the employee from potential losses.

]]> By: Tommy http://cody.blogs.foxbusiness.com/2008/08/29/youre-an-idiot-for-putting-your-retirement-money-into-the-same-company-you-work-for/comment-page-1/#comment-1397 Tommy Wed, 03 Sep 2008 17:01:02 +0000 http://cody.blogs.foxbusiness.com/?p=367#comment-1397 Like most journalists who have limited space to post your views, you are only partially right. Experts say it takes 15-28 individual stocks to become completely diversified. This means you should have no more than 7% in any individual stock if all are held on an equal basis. This is referred to as unsystematic risk or risk that you can diversify away to a very large degree. Systematic risk is undiversiable which means you could have 1,000 stocks and still have principal, market, interest rate, currency risks etc. Ownership in the stock of the company you work for means you have some skin in the game. You work harder, smarter and turn the lights off at the end of the day to cut expenses. It does present more risk to your overall portfolio and you have compounded it by having your income also tied to your portfolio returns. Many people have retired only due to their exposure to their company stock. Long story short, never say do anything 100% - it's not prudent. If an employee feels good about their companies prospects, by all means invest in the company stock; but keep the exposure to less than 10% of your entire portfolio value. Like most journalists who have limited space to post your views, you are only partially right.

Experts say it takes 15-28 individual stocks to become completely diversified. This means you should have no more than 7% in any individual stock if all are held on an equal basis. This is referred to as unsystematic risk or risk that you can diversify away to a very large degree. Systematic risk is undiversiable which means you could have 1,000 stocks and still have principal, market, interest rate, currency risks etc.

Ownership in the stock of the company you work for means you have some skin in the game. You work harder, smarter and turn the lights off at the end of the day to cut expenses. It does present more risk to your overall portfolio and you have compounded it by having your income also tied to your portfolio returns. Many people have retired only due to their exposure to their company stock.

Long story short, never say do anything 100% – it’s not prudent. If an employee feels good about their companies prospects, by all means invest in the company stock; but keep the exposure to less than 10% of your entire portfolio value.

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