Bill Woessner <woessner@[EMAIL PROTECTED]
> writes:
> Normally, I'm adverse to holding that much stock of a single company.
> So I'd want to sell it ASAP. But there is the incentive to hold on to
> it for a year to get long-term capital gains treatment.
If you're buying 10% of your salary into it, and you can
unload it piecewise (say, quarterly purchases) after a
year, you shouldn't end up with more than 10% of your
salary in it at any time. The question is what multiple
of your salary you already have saved otherwise. If
you have no savings whatsoever and you put 10% of your
salary into this, you're way way overweight the company.
If you have, say, twice your annual salary already saved
up, then you're putting no more than 5% of your assets
into the company (on top of your pay) - which is a level
of risk that's not terrible.
It really depends on a variety of factors unique to
your own situation - how risky the company itself is,
how your financial situation is otherwise, etc.
> So basically, I'd just like to hear what other people have to say
> about such programs. If you have personal experience, so much the
> better!
I participated in just such a plan until I'd accumulated
assets through it which added up to as much of a concentration
in my employer's stock as I was comfortable with. Then I
stopped. I didn't go and cash it out and then start again,
though. I just sat on that stock, watched it appreciate
even more, and sold it off around the same time I left
that company. It wasn't a home run, but it was a decent
and easy investment to make.
I'd recommend it as not a bad idea - *if* your situation
and other assets make it not too risky. I'd definitely
not make it my only savings, and I'd not let my investment
in my employer build up to more than a small percentage
of my overall investments - just like I'd limit my exposure
to any single stock.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators
strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM
THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on
the
Newsgroup.
|
