This article was originally published on U.S. News by Kristin McFarland, Wealth Advisor at Darrow Wealth Management.
Unlike most questions in financial planning where the answer is typically “it depends,” the answer in this case is decidedly yes; you can have too much employer stock – and many people do.
There are five common ways individuals can wind up in a concentrated stock position. Most commonly, employees don’t realize how much of their financial future is tied to their employer. The same principles of diversification and risk management that apply to asset allocation in an investment account apply to your entire financial picture.
So if everyone knows the old saying “don’t put all your eggs in one basket,” why do so many people do just that?
