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Author: gogreengo Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76106  
Subject: Stock split in 401k Date: 2/8/2004 3:33 PM
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My DH's company is planning to do a stock split on the company stock, splitting each share into three. Can anyone tell me how this might impact the value of the company stock holdings in our 401k? The holdings in the 401k are actually a unitized stock fund. Should we just sit tight, or maybe diversify some now before the split? Or will the value of the stock actually go up as a result of the split?
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Author: Mark0Young Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39036 of 76106
Subject: Re: Stock split in 401k Date: 2/8/2004 4:17 PM
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Can anyone tell me how this might impact the value of the company stock holdings in our 401k?

It will have zero impact.

Usually a stock split occurs becuase the Board of Directors believe that by having a lower price for the stock, more investors would find the shares affordable, pushing up the value of the shares. Whether or not that happens is another story.

Should we just sit tight, or maybe diversify some now before the split?

Whether or not you diversify is a question separate from the split.

If your DH's 401(k) is overweighted in the employer's stock, diversifying would be a good idea. Generally, one shouldn't have more than 10% of one's investments in the employer's stock if there is a way to diversify.

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