The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing

URL:  http://boards.fool.com/ltltim-getting-ready-to-transfer-401k-11766804.aspx

Subject:  Re: Company Stock - Opinions? Date:  1/7/2000  9:14 AM
Author:  ZZFly Number:  17477 of 86149

<<...I'm getting ready to transfer 401K holdings to an IRA. Fully 50% of those holdings are in a single company stock. I plan to sell at least some of the stock, but I'm curious to hear opinions...the company is Fortune 50 and is expected to have good EPS growth in the near-term. What percentage might you hold onto and what percentage might you spread out into other equities? I'm a conservative investor (say it isn't so!) and don't want to take every breath by that ticker symbol every day. Thanks! >>

I am in a similar situation - my wife's 401(k) has a company stock account. I assume you are still employed with the company in question, if not the answer is not much different.

Diversification in your portfolio is critical to eleminate stock specific risk - if your income is also tied to the company this risk is increased.

You may want to consider reducing you single company holding to 5% and no more than 10% of your 401(k) protfolio.

Using an asset allocation model for various asset classes, internationa, small cap growth, large cap value,large cap growth you can build a long term strategy. We do not know your age - but you said that you were risk advise - bonds should also be considered.

An example of this portfolio might be:

Specific company stock 5%
Large Cap Growth 15%
Large Cap Value 10%
Bonds 20%
Small Cap Growth 20% (two seperate funds)
S%P Index 20%
International 10%

I hope this helps

P.S. To evaluate funds you may want to consider morningstar and sort the funds by those in the top 8oth percential for the past 3 and 5 year returns ending 12/31/99




Copyright 1996-2017 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us