Limit company stock
Remember Enron? You already count on your employer for your paycheck -- don't count on it for your portfolio gains as well. We tell you the acceptable amount.
By Penelope Wang, Money Magazine senior writer

(MONEY Magazine) -- You may have full confidence in your company's future, but when it comes to your 401(k) strategy, nothing can trip you up more than blind loyalty.

Never put more than 10% of your money in your employer's stock. After all, your job security already depends on your firm's financial health.

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If you load your 401(k) with your company stock, you are wagering your retirement security on your employer as well.

Yes, if the stock soars, you'll do better than if you had spread your money around. But the risk isn't worth it.

The most recent dramatic example of just how serious this risk can be is Enron, which imploded after its executives allegedly engaged in various acts of malfeasance.

But corporate shenanigans aren't the only reason a company's stock might take a major hit. A company with perfectly honest management might fall on hard times because the management is incompetent, or, if competent, perhaps the victim of economic forces over which the managers have no control, say, an influx of cheaper products from abroad.

Or maybe the big product the company was counting on to grow earnings generates disappointing sales.

Fact is, American corporate history is bursting with examples of companies that once strode the economic landscape like a Colossus that later found themselves struggling for their very existence. Just look at Ford and GM.

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More resources:

How fast will your savings grow? Tell us how much you have, how long you will save and at what rate, and find out what your nest egg will grow to.

Money 65: Best funds to own Picks in every category can round out any portfolio.

The get-started retirement plan Puzzled about what to do now that you've signed up for your 401(k) plan? Money Magazine's Walter Updegrave has some answers.

The Last 401(k) Guide You'll Ever Need Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.