Businesses that allocate higher than average amounts of employer stock to 401(k) plans tend to underperform those of their peers the following year, both in terms of relative performance and on a risk-adjusted basis, new research reveals.
Morningstar Investment Management discloses this finding in a report, "Employer Stock Ownership in 401(k) Plans and Subsequent Company Performance." As a result of the findings, the paper argues against employees holding significant amounts of company stock.
See also: Employers enhancing stock purchase plans
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