so I contribute 15% of my income into my 401 and it is a decent size. Alot of my contribution goes into the stock of my Company. It has fallen since all this shit has been going on in the market and I just put it down to an adjustment. Now, I hear China wants to convert its US currency to Euro. My question is, should I take all my money out of the stock portion and park it somewhere safer? My guts tells me I should. Just wanted to know what some of you experts think...

 

From my standpoint as a wholly unqualified financial novice on the edge of bankruptcy, I think your gut is partially right.

from the company stock in your 401K. I'd hold no more than 10-20% in the company (unless you work for Enron or a domestic automaker- then it's 10% max).

At the age of 51, I would shift probably half of the 401K to aggressive and moderate risk mutual funds rather than stocks or bonds, but I would still keep some individual stocks.

 

I appreciate your thoughts.

 

That is WAY too much company stock to hold. Unless your company stock has been significantly and consistenty outperforming the market, there is no excuse for doing that. In fact, your company should not even allow you to do that.

Not trying to be an ass, just don't like seeing people get screwed when a company goes belly up. As Will also mentioned, you may want to start shifting some of your money into less risky investments, depending on your anticipated/targeted retirement age. Check what options your plan has, as many now include mutual funds specially "designed" based on retirement - like a "2025 Fund".

 

I was going to weather the Storm until I heard China was going to rid themselves of US dollars and switch to Euros. But, the more our money takes a beating, the more attractives our goods become.

 

The first question you should figure out is: Will your company's stock perform well going forward? Given that your an employee (even if your at the lowest level), you have access to more (legal) resources to find that answer than a wall street analyst does.

Then if the answer is No, you should stop buying company stock, and then try to answer the question about what to do with the stock you already have

 

Here is my thought on the above. I wouldn't buy company stock in my 401k unless it out performs the market or you can purchase it at a discount. Even if you were able to purchase the stock at a discount I would still limit your exposure to company stock. If you were a conservative investor and your companies stock was very stable you could use that to stabilze your portfolio but I would never put more than 10% in any one position.

You may already be doing this or your MAGI could exceed the Roth IRA contribution limits, but here is an idea. Before you contribute 15% to a 401k I would fully fund a Roth IRA unless your match on your 401k is 15%. The Roth will help you with your tax situation when you are retired and there are no RMDs like there are with 401ks and traditional IRAs.

 

my company's matching portion goes into the company stock. i end up having to move it into the funds that i selected.