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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81353  
Subject: Re: Roth IRA vs portfolio Date: 5/8/2007 1:35 PM
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However, depending on what your total investible asset base is, he may be right on with suggesting that you liquidate your ESPP. Any more than 5% - 10% of your total investible assets being invested in a single stock is a red flag, especially if it's your employer's stock. This is because if your company runs into issues, and has to start laying off people, it is likely that their stock will have dropped, too. So you suffer two blows at once - potential layoff and drop in stock price.

Just to add a little to this, I have found it generally more prudent to sell my ESPP stock as soon as I buy it and pay the taxes on the short term gain, if any. That way, I make the discounted amount right off the bat, and if that's the only gain on the stock, even after taxes on the discount, I still come out ahead. Then I put that money in other investments that I may prefer.

I also happen to work for a company that is not one I would choose to invest my dollars in if I were picking a stock, so that also colors my thinking, but generally speaking, I'm with aj on this one and don't like all my eggs in one basket.

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