Mutual funds verses company stock investments

What are the advantages and disadvantages of investing in mutual funds verses your company's stock for retierment investing funds?

© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/finance/mutual-funds-verses-company-stock-investments-7got

Solution Preview

... or in multiple types.

The main advantage of investing in your company's stock is that you know the managers, and possibly the directors, of the company. You may have a very good idea of the company's plans and prospects. Another advantage is that the employee need not pay an administrative fee to a mutual fund company to manage his or her investment because it consists of the stock of a single company. The major disadvantage of investing in the stock of the company which employs you is that you are depending upon that company for both your current salary and your investment returns for the future. Should that company go bankrupt, you will lose both your current income (due to being laid off) and your prospects for future income (because its stock will become worthless or close to it). This ...