5 portfolio time bombs

These common mistakes could send your retirement savings up in smoke. Find a better way to divvy up your investment pie.

Too much company stock
Problem
Too much company stock
Remember when hundreds of WorldCom and Enron employees lost their entire savings? It was a brutal reminder of how dangerous it is to bank your retirement on a single company, but the lesson seems to have been forgotten.

According to a recent study by Fidelity, employees who own shares of their company dedicate 29 percent of their 401(k) to it on average. "People keep company stock because they know the firm and are invested in it in other ways," says Stephen Horan, head of private wealth for the CFA Institute.

It's also easy to overload on your employer's shares without meaning to, particularly if your 401(k) match is in company stock or you get stock options.

Plus, if you work for a major corporation, you likely own even more of your company stock through any large-cap funds you own.

Hot performers Solution Too little diversification Solution Ignoring your portfolio Solution Being too conservative Solution Company stock Solution
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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 LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. 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.