Reallocating your 401K


bank.jpgWell, I did it. I reallocated my 401k. I was really nervous about it, and I’m still a little sick to my stomach, but I know in the long run that it will be much better because now I am more diversified. What really scared me was that almost 30% of my entire 401k was in company stock and if (God forbid) the company went under, well there goes 30% of my 401k money. I’d be stupid to leave that much in there. Enron anyone?

At first, I was worried about all the money that I lost by selling my company stock. After all, last year it was around $38 a share, and of course I was gifted shares and perhaps bought some too at that price. Now the stock is around $5 a share. That’s a lot of money to lose! However, I am looking at it like this: I didn’t technically pay for it, so I really haven’t lost any of my own money. Next time the company matches my 401k contribution, I’ll sell the stock they give me. I am not too worried about the company failing, but after all, it is a bank, and we all saw what happened with Indy Mac.

I feel good about my decision. Now I can sleep at night without worrying about having so much in company stock. It’s never good to have too many eggs in one basket.

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