I Sold All of my Company Stock

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I logged in to check my 401k performance the other day and realized that about 35% of my 401k portfolio was in company stock.  I personally don’t allocate my contributions to company stock, so it was all from the company match.  While I am thankful for the 401k match, I also don’t like having that much of my 401k tied up in company stock.  I don’t know much about investing, but I do know that it’s not good to have your eggs in one basket, especially in your company stock.

I am reminded of a couple years ago when the bank I work for was not doing so well.  At one point our stock was $45 a share.  Before we were bought out, our stock was down around $2.  Many people, including the branch manager and licensed investment adviser, had their entire 401k in company stock.  To say they lost money would be an understatement.  Unfortunately, I know this happened to many others as well, and not just those who worked at the bank.

I sold all the stock and put it into a money market fund until I decide what I want to do with it.  At least it will be earning interest (although not much) while I make a decision.  I left my future contributions how they were, and I’ll have to go back in 3-6 months and reevaluate.  If I have too much stock then, I’ll sell again. I’m thankful that the company still does a 401k match.

What’s funny is the investment adviser at my branch told me that I shouldn’t do it.  I’d make more money if I left it in the stock.  I didn’t feel comfortable doing so, so I did what I thought was best.

Does your company match your 401k contributions?  Do you receive stock if so?

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7 thoughts on “I Sold All of my Company Stock

  1. Joe Plemon says:

    I am mostly retired, but I used to have a 401(k) with a small company that was privately owned…therefore no possibility of the match going into company shares. Still, this post is a good heads up for all 401(k) participants to check where the employer’s match goes. If anyone thinks putting all their eggs into their company’s basket is a good idea, I have one word for you: “Enron”.

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  2. Budgeting in the Fun Stuff says:

    I get a 6% match on my 6% to our 401k, but my company is private so I have zero company stock. I have 100% of my 401(k) in the Vanguard 2035 target date mutual fund which is diversified within itself…I’m a lazy investor…our Roth IRA is in the Fidelity 2040 target date fund…

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  3. Bucksome Boomer says:

    My company is privately owned like Joe’s previous employer. However, not only should people not have too much tied up in one stock they should also not have it tied up in one sector or type.

    Great reminder!

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