You Shouldn’t Invest In The Company You Work For

Young investors usually start off investing in stocks through mutual funds, often through retirement vehicles like 401k funds and IRAs. In many cases, single stocks (stock in a single company) don’t enter into an investor’s portfolio until much later. Often, the first time an early-stage investor owns a single stock is when they are granted some stock in their own employer firm as part of an incentive program.

What should this young employee do with their new stock? They believe their company is going places, and they might have heard some office chatter about how much money their coworkers have made by holding stock during a recent period of rapid growth.

I’m going to make an unpopular recommendation. Do not invest in your own company, and if you own shares already, sell them!

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Best Financial Reads This Week – 11 Feb 2020

My favorite article this week shows how in the past 20 years or so, the age cohort of American CEOs hasn’t changed at all (i.e. baby boomers). Stay tuned next week for an explanation of why you shouldn’t own stock in the firm you work for!