Recent corporate scandals have not sufficiently dulled employees’ taste for investing in the companies for which they work, according to the Associated Press. Citing statistics from Profit Sharing/401k Council of America, AP says that as of 2004, one out of every eight investors in 401(k) plans placed at least half of their assets in their companies. While the figure is an improvement of the 20% in1999, the council says it is still dangerously high as such exposure creates a bigger risk if that one stock falls. “Familiarity tends to breed complacency,” Christopher Jones, chief investment officer at Financial Engines told Money Management Executive. Jones suggests that employees should put a maximum of 20% of their assets in their company’s stock.
