Using Behavioral Economics to Improve Diversification in 401(k) Plans: Solving the Company Stock Problem
نویسندگان
چکیده
When company stock is one of the options in a 401(k) plan then even more serious diversification problems can occur. As the recent Enron experience has highlighted, employees with large company stock holdings in their 401(k) plan can discover that they have lost much of their retirement wealth at the very time that they are also losing their job. Even in less drastic circumstances, concentrating a large portion of retirement savings on a single stock is a risky strategy.
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