Employees who participate in their company’s employeestock purchase program may have moreconfidence and control over their financial well-being.

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That’s according to Fidelity Investments research that looked atthe behaviors of some 300,000 employees over a two-year period.

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Among its findings, Fidelity determined that 48 percent ofemployees who purchased company stock through an ESPP sold alltheir shares within two years, demonstrating the rolecompany stock can play within anemployee’s overall financial plan.

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In spite of the preponderance of stock sellers, it wasn’t a caseof employees flipping stocks; only six percent of the employees whosold all their shares did so within 10 days of purchase.

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The research did find that employees in ESPPs that offer ahigher discount are more likely to sell sooner. Employees can oftenpurchase company stock through their ESPP at a discount, andFidelity found that nearly 40 percent of employees with a 15percent discount sold all their shares within 90 days, comparedwith just 25 percent of employees in plans with a 5 percentdiscount.

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However, higher discounts also contribute to higher employeeparticipation rates—and employees at companies with ESPPs are lesslikely to borrow from their 401(k)s.

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Plans with a 15 percent discount, the research found, havedouble the participation rates of plans with just a 5 percentdiscount. In addition, employees faced with urgent expenses cancash in shares from an ESPP without the retirement repercussionsassociated with 401(k) loans, and can also avoid the need to repaya loan if they change jobs.

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According to the research, younger employees were more likely tosell off stocks they had purchased than older ones; more thanhalf—57 percent—of employees under 30 sold all their shares withintwo years, while 58 percent of employees more than 60 years oldhung onto all the shares they purchased.

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