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I think it's very poor idea to own stock in your employer. This famously is highlighted by Enron encouraging it's employers to invest their retirement account
by lev99 8y ago
I think it's very poor idea to own stock in your employer. This famously is highlighted by Enron encouraging it's employers to invest their retirement account disproportionately in enron stock. The employees that did lost their job and their retirement account at the same time. [0]
It's probably a less bad idea to own stock in a company you control on a managerial level (C level or on the board).
[0] https://www.nytimes.com/2001/11/22/business/employees-retirement-plan-is-a-victim-as-enron-tumbles.html https://www.nytimes.com/2001/11/22/business/employees-retire...
- TheCoelacanth 8y agoEven for CEOs and board members diversification is a good idea. They are just limited in how much they can diversify because it looks bad if they sell too much of their stock.
- charlesdm 8y agoHonestly, it depends. Generally you want to divest, but you would have been an idiot to divest Facebook stock, for example. If you believe it's a great investment (which you might -- given you work there!) then keep the money in. You might understand the business better than other investors that are not working in the company because you have a better view of the market and/or the stuff that is being worked on. If not, sell and reinvest in a different asset.