Many people acquire shares of the own companies stock over their careers and some even invest in additional shares in their retirement plans. Concentration risk is real, ask the employees of Enron. A seemingly great company’s shares could suffer a significant loss in value while the stock market soars to new highs. A more recent example of this General Electric which lost 42% in 2017 while the S&P 500 gained 21%. Diversification is a critical aspect of risk management and an important part of investment management and the financial planning process. Below is an article that explains this issue well.
If you are unsure if this applies to you and/or would like assistance if diversifying your portfolio, please contact us for assistance