The only regular employees I know who've set themselves up for life by shares did it by holding on to company shares.
as an employee you've a better idea of what's happening than the outside world. Future products, current sales etc. etc..
When you diversify for safety, you're diversifying from a company where you have (legitimate) insider information into
I think it makes sense to hold on to something, but in the region of 5%. There is huge variance over decades and sometimes things go well.I know enough cases where holding tech and pharma MNC shares has paid off, that I'd not have a flat recommendation that all staff dump company shares ASAP. Especially if these people and perhaps are involved with the next few years product lines that are being developed.
But if they had diversified into different shares (as is being recommended) would they not have had a similar outcome?The only regular employees I know who've set themselves up for life by shares did it by holding on to company shares.
No.But if they had diversified into different shares (as is being recommended) would they not have had a similar outcome?
It's when people sell their shares and buy depreciating assets (cars, bikes, boats, toys etc.) that they lose the long term gains.
For example family friend worked for Apple in Cork in the 90s. Share price has increased 100-fold since. Not sure when he cashed in!
I think it makes sense to hold on to something, but in the region of 5%.
That's when he was working for themSo what? Wasn't there a time that Apple nearly went bust?
I don't think you can just say a definite 'No'. Are there no examples of people who have diversified out of their employers stock and became wealthy?No.
You can easily find examples of 100x increases/decreases in the price of individual stocks over a decade.
Not for the market has a whole. It's the old risk/reward trade-off.
It is utterly unambiguous that the expected return of a single stock has much, much higher variance than that of a group of stocks.Are there no examples of people who have diversified out of their employers stock and became wealthy?
Hi ashamblesI think the mistake people are making is assuming someone with say 250k in shares and an 80k salary was given around that value in shares by the company, in reality they were probably given a fraction of that, they got there by taking a risk and would never have reached it so quickly by diversification.
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