Should I Invest All My 401(k) Money in My Company’s Stock?

It’s never wise to put all your eggs in one basket, particularly in stocks. The stock market has ups and downs, and individual companies may fall on hard times very quickly, due to management mistakes, changes in the economy, or sheer bad luck.
This doesn’t mean your company is a bad investment or that you shouldn’t express your loyalty by being a shareholder. But even great companies—think of IBM or AT&T recently— can see frightening declines in their stock. By all means, invest in your own firm, but spread your money around so that you’re protected if the unexpected happens. Diversification should be your watchword.

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