Do Not Own Equity in Your Firm
Do you own any of your employers stock? You definitely should not. An enormous amount of your financial security is already dependent on your companies performance. If your company struggles, you could not receive a bonus, a raise, or even lose your job. It would not be prudent to also have part of your investment portfolio directly dependent on your firms performance. Diversifying your investments lowers your portfolios risk and helps you to sleep at night.
*Note
It’s ok to participate in your firms Equity Purchase Plan if they offer you shares at a discount (free money), but you should liquidate these positions as quickly as your restrictions allow you. Also, some firms distribute some of your earnings in equity – there is nothing wrong with this, but again you should liquidate these positions as quickly as your restrictions allow you.
