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Stocks & Bonds

SOLVED: I Own Too Much Company Stock

It pays to diversify your investments. Think Enron.

To avoid unnecessary risk, you should limit your company-stock holdings to about 10% of your total investments. That can be tough if your employer makes its matching contributions to your retirement plan in company stock.

You certainly want to contribute enough to your 401(k) to capture the company match. But if company stock represents a significant share of your 401(k) investments, you should sell some of it as soon as you can and funnel the cash into other options within your plan.

Head for your benefits department to find out if your employer has any restrictions on your ability to sell. One result of the Enron debacle is that many employers are relaxing their rules on the sale of company stock. For example, you may be permitted to sell your shares after you have been with the company for, say, three years, or after you turn 50.

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