should I change my 401k company stock investment when the stock is dropping?

Point one: the rule is buy low, sell high in investments that you know & understand. Do not invest in things you do not know or understand.

Point two: You are exceeding the limit placed by general investing advice for investing in the company you work for. The top limit is 10% of net worth (Not income. Net worth) There are some really good arguments (in my opinion) that say you should limit your investment to less than 5% of your net worth UNLESS you are in a position to change company direction or see inside the preparation of financial documents (Top management).

I hope ALL your 401k in NOT in ONLY the company stock - you are are looking too short term anyway

working for your company - you would have a better idea than anyone else OUTSIDE the company if the company is doing well or not - if company is doing well, then stock price will come back - just don't put a lot of your 401k money in only one investment - especially your own company's stock - I saw one guy that did that at a company i used to work for - stock was around $8.00/share - a yr or 2 after I left, the parent company went bankrupt - stock went down to 15 cents or something, then delisted totally - I don;t know if all his retirement savings was wiped out or not - PLUS probably losing his job when company closed down

Before I comment, a simple disclaimer should be made: There is no one *right* answer. As others have said, in the long run, buying low and selling high generates the most profits. However, if you're in your 401(k) for the long run, don't worry too much about a drop in your company's stock price. Since you're likely continually investing in your company's stock (my 401(k), for example, invests in my company's stock once every two weeks), then, over the long run, you're taking advantage of what is known as dollar-cost averaging.

I recommend you read up on this phenomenon and then take comfort in knowing you shouldn't be freaking out over momentary peaks and valleys in your company's stock:

http://en.wikipedia.org/wiki/Dollar_cost_averaging

If the company is on firm footing then probably not. Although if you have more than 10% of total portfolio (including investments outside of the 401k) in company stock you should ease up.

Consider the statement:

Buy ** LOW ** sell HIGH.

As you see, very hard to do in real life. Most people do the opposite just as you are proposing.

Having all of your retirement money in your employer company's stock is not a good idea. Ask the people who worked for Enron who went from millionaires to broke overnight. I would have not more than 50% in your company stock, and that is just because they match your contributions. Otherwise I would say 30% maximum.

The best thing you can do with your 401k right now is simply roll it over to an Indexed account.

Indexed accounts offer you a guarantee rate (0%, 1%, 2%) and a cap rate (6%, 7%, 8%, etc).

With this strategy, anytime that the market crashes or goes negative YOU WON'T. You'll keep your principal plus any interest that you may have gained. But when the market goes up, you'll go up with it... up until your cap limit.

This is a great strategy for a down economy which we are in right now.

Different companies offer different guaranteed and cap rates and have different fees. There is over 100 companies that offer these types of products but instead of researching all of them by yourself, I can do it for you.

I've been doing this for over 5 years now and I've gotten very good at it. I'll find you the best rates possible for your situation and take care of all the technical stuff for you as well. No headaches, and no drama.

If you'd like to learn more about this, please contact me below. My name is Arman Vakili.

Phone: 310-500-8596

Email: SynergyVisionary@gmail.com

What's more important than short-term stock movements is your diversification or lack of it. NEVER keep more than 10% of your total account in company stock - no matter how good you think it is.

Dollar for Dollar is 50% off, we could've been more helpfull with the name of the company.