Replies to post #175988 on DD Support Board and Research Team

[DragonBear]

I always wondered if many employees fund their 401Ks solely with shares in their employer.

At one time in a more naive life I put 25% in GE stock, and the rest in who knows what fund offering. At that immortal age it was all black boxes. I worked at GE from 1984-1989. So the 401K wasn't that large, with the 25% still being low risk. But you are correct dumping everything into company stock for decades in most companies is extremely high risk. Less so for Pharma. Even if they are hit with a major drug lawsuit.

So if one is the secretary, and you know a shit storm is coming, and one has the right to reallocate funds in a given time period, can you do so, and not get caught for insider trading. Might be able to pull it off.

[price_and_volume]

Fwiw, 'professional advice' is to NOT DO THIS

I always wondered if many employees fund their 401Ks solely with shares in their employer. Anyone know?

Due to concentration-risk - if your company underperforms, you could lose your job as well as see the share-price damaged. To avoid that double-whammy, it's advised to 'diversify' retirement dollars elsewhere...

Nowadays I believe it's MUCH MORE TYPICAL for company 401ks (and now Roth 401ks) to offer index-funds and 'target-date' funds based on years-til-retirment.

That said, I know a few who continue to put investment-dollars into their company stock, but without the matching element. Not arguing against company stock, but seems irrational to forgo the match in that case.