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5/30/2015 9:29 am  #1

The most dangerous stock in your 401(k) plan

The most dangerous stock in your 401(k) plan

What's the most hazardous holding you could have in your 401(k) plan? The answer: your employer's stock.

No matter how much you love the company you work for, having too much of its stock in your retirement plan is a risk that's rarely worth taking.How much is too much? Most financial planners will tell you that company stock should represent no more than 20 percent of your holdings.

Lee Rosenberg, CFP professional and president of American Investment Planners in Jericho, New York, says he's more comfortable with a 10 percent max. As he notes, most large, well-managed mutual funds rarely have more than 2 to 5 percent in any single stock.What's more, investing in the company you work for can be doubly dangerous. If your employer falls on hard times, you might not only lose money in your retirement plan -- you could lose your job, too.

Last edited by Common Sense (5/30/2015 9:30 am)

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