I also feel there may be a psychological factor at work when it comes to company stock. I get the sense that some people feel they should own company stock out of loyalty to their company and feel disloyal when they sell shares. I tell people owning a few shares is ok but having a significant percentage of ones savings in your company can be a huge mistake.

I recieved stock in a company I worked at recently and sold the entire stake upon vesting. My reasoning was the same as Ryan’s in that I had a very high exposure to this company simply from the fact that it was my sole source of income. Since I sold it the stock is down 25%.

It’s funny that people mention Buffett. When I recieved shares in my company I asked myself a simple question. Would Buffett own this? The answer was no.

@Dividend Growth Investor, great comment. One thing to keep in mind is that some companies have a policy on taking a negative position on the company whether through selling short or buying a put. Not sure how they would every find out, but it was a policy at my last company and I guess a terminable offense.

I think people often have too much confidence in company stock. One ex-boss wanted to have company stock because she thought we were a good company. We were good as people, but I have no idea how we were financially. She had even less. But it was a good company. Fortunately, she was primarily invested in a Target retirement fund. Not as dynamic, but avoids major screwups too.

I wouldn’t mind getting company stock as the match if I could sell it in a certain period. I’d rather it mimic my choices, however.