What if I told you to take $200,000 and invest it all in Apple (or Google, or Amazon, or Netflix or Facebook)?
If you’re smart and a current Financial Zen member, you’d fire us. If you’re smart and not a current member, you never will be.
That is clearly as irresponsible, misdirected and risky as an investment recommendation can get. Only a quack would advise someone to dump that much money into one stock.
…and yet…
How much of your own company stock do you own?
It would not surprise me if it’s your single biggest investment outside of your house.
So if we agree only a whacko would advise you to keep $200,000 in Apple (or any other stock), why are you okay sitting on so much company stock?
It’s not you. It’s your monkey brain. It’s just how we’re wired.
Psychologists call it “endowment bias.” We irrationally place more value on things we already own.
I’m sure your company’s future is bright. Hopefully, the stock has even done well recently.
But ask your monkey brain this – “If that was money sitting in cash, would you invest it all in just one company?”
