Hired: Now How Much to Put in Company Stock Plan?

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benefitsHired. So, your focus now shifts from looking for a job to other pressing financial matters, such as how much to put into your company's stock plan.

Newsweek rejoices with you that you are now working. But it warns that some of your current compensation can evaporate if you invest it in the company's stock and that stock tanks.

Employees at corporations ranging from Enron to WorldCom learned that the hard way. Many saw their retirement nest egg vanish. Shareholder lawsuits such as those against WorldCom netted a nice return for lawyers but little for the victims. No company is too big, too profitable, or too well run not to lose much or all of the value of its stock.

Newsweek's Jon Mont interviewed investment experts such as Hewitt Associates. The latter recommends a 10 percent maximum. Others would have you go much lower and spread the risk by putting your money in other kinds of investment vehicles.

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