Company's stock going down. What to do?

[Broken Arrow]

Steve---I would agree in general. But you wouldn't want to apply this rule to all companies. Look at Bear Sterns, WAMU, Wachovia, AIG. Those were the biggest companies yet they all fold. Their employees are now holding worthless stocks except AIG.

Yes, and that's exactly why I had hoped that the author would come back and tell us what company he works for. If he works something similar to WaMu, he needs to get out as quick as he can. If he works for Johnson & Johnson, he could probably take his time to slowly reduce his position.

But in the end, we all agree that nobody should have half their retirement tied up in their own company stock. Heck, probably not even 10%, depending on who it is.

[Exile]

If I had to do it over again, I would have allotted a very small portion of my 401(k) to company stock, which was volatile to say the least. As it was, the poor performance of the small amount that I did invest dragged down the rest of my 401(k) portfolio.

And like a shmuck, I held on to that stock for a couple years after I retired, hoping that it would bounce back. But of course it never did. I finally sold it several months ago, and since then it's dropped even further.

If you weren't meeting your required work goals, Zillionaire, wouldn't your company terminate you regardless of your excuses? Well, it cuts both ways. If the company stock performance is hurting your overall 401(k) balance no matter the reason, it's time to "fire" that portion of your retirement plan.

If the stock is doing badly due to a shaky financial standing overall, consider terminating your employer as well before they get the drop on you via a layoff or a closing.

[Zillionaire]

It's an air craft company though. I hope they'll do better next year. Right now I stopped contribute to my 401 because it's keep dropping down $2-4 each day.

[tripods68]

Do you mind telling us what is the name of the Aircraft company? Maybe this stock is really a dog that you'd want to stay away from altogether.

I personally not a fan of the Airline industry stocks except maybe Southwest. It's just harder for them to make any money now with fuel cost, labor, and union contracts.

[disneysteve]

It's an air craft company

I personally not a fan of the Airline industry stocks

He didn't say airLINE, he said airCRAFT. Boeing, maybe? They're off over 50% from their 52-week high.

[tripods68]

Nice catch there Steve

[Zillionaire]

marketwatch.com/quotes/txt <- look at the trend. It's horrible isn't it?

I see every aircraft company out there is in a bad shape.

[NYFinancialPro]

Here is my analysis

1. You should not have 50% of your retirement with one stock or company.. period

2. You need to evaluate your company's financials. How much debt do they have, what are the companys assets. Most of the S&P dropped over the past month of so that is no reflection alone of your companys stability.

3. It might not be a good time to move your money, because you will asorb the total losses. Depending on your retirement age, you might have the flexibility to stop contributing to your company stock, and wait for the exsisting shares that you have currently to rebound and grow more.


This is just some quick thoughts, to get the best analysis of your situation you should really talk to a financial professional. I am always there to help if you need me.

Thanks,
NYFinancialPro

[Zillionaire]

Thank you guys for great inputs and suggestions. Their stocks seem going up a bit lately. Down below is my new investment elections. Should I change anything?

FID FREEDOM 2050 25%
Large Cap FID BLUE CHIP GROWTH
Large Cap VANG INST INDEX PLUS 30%
Large Cap FID EQUITY INCOME
Mid-Cap VANG STRATEGIC EQ 15%
Small Cap FID SMALL CAP STOCK
International FID DIVERSIFIED INTL
TEXTRON STOCK 30%
VANG INST DEV MKTS

Appreciated it

[Broken Arrow]

I assume Textron is who you work for right?

I took the liberty of taking a quick look at their stock, and I have to say that it's a not a bad one. Beta is pretty high though. Very volatile stock in an already volatile market. Great for trading, but still a bad idea to hold so much, especially if this is your retirement nest egg. Plus, it doesn't help that the recent news surrounding the company is largely negative....

If you want to, you could just move all your money into the Fidelity Freedom 2050 and call it a day.... Assuming that is indeed your target year.

[KGeary]

I've been contributing to my company's Roth IRA (401K) since day one. Half of my contribution to company's stock and the other half go into blended fund investments. But recently their stock keep going down and I'm losing money every day. Please input some advice.

Thanks so much

Never put money in your company's stock. You need to get this money into mutual funds immediately.

[tripods68]

The 20 days moving average in relation to MACD suggest the stock is going up. But using a long time horizon 200 day moving average suggest the company is has reached the bottom and now ready to go back up. That's good. Also, many speculators have chim in on the upside which help explain high volatility. This also suggest that this stock is prime candidate for a hostile take over bid--being the world largest business jet maker through its cessna unit. How far the stock will go, they already forecast earning in 2009 will be below expectation. At $17 per share, i like this stock.

[Zillionaire]

It's a bad news that our CEO sent out a message that they'll reduction employees. So what should I do with my 401K before they lay off me. I'm not sure if my name is on their layoff list :-)