Investment Advice

San Francisco, CA, USA — A lot of workers with company stock plans lost big in the past year. Last year we introduced you to a family sitting pretty with huge stock profits and a big dilemma: should they sell? Here’s how their actions then can help you today.

With family and job responsibilities, Phyllis and Chris Bright had little time for all their finance questions, so we put them in touch with San Francisco financial planner David Yeske.

“I’d like to retire at 50,” says Chris. That was a real possibility since the Brights hit the jackpot with their high soaring stock options from high-tech jobs.

But more than 60 percent of their invested assets were tied up in one stock and that was too limiting for Yeske, who advised the unthinkable: selling off the goose that laid the golden eggs. “I was hesitant because the stock was doing extremely well,” says Chris.

Reluctantly and with a little nail biting, the Brights sold 60 percent of the stock. And, as it turns out, it was a brilliant move. “We’d probably be suffering from depression right now,” says Chris.

That move saved the Brights nearly a million dollars. Their company stock, once trading around 90, hovers at 18.

It’s been bad news all around. Lucent Technologies is down 80 percent, Nortel is down 76 percent, Hewlett Packard down 63 percent, PG&E down over 50 percent. Heavily invested employees in these companies had too much of a now bad thing.

Experts say more than 10 percent in any one stock could hurt. “I was merely providing them with prudent advice that is appropriate for all markets at all times,” says Yeske.

Yeske is still a big backer of stock market investment. His advice if you’re in your 30’s and saving for retirement? “They should probably have almost all of their money in equities of some kind — stock or stock mutual funds,” he suggests. He also recommends a good mix of large and small companies both here and abroad.

If you’re in your 50’s, be just slightly more conservative. “Maybe 15 or 20 or at most 25 percent of portfolio in bonds. The balance, 75 percent,in stocks or stock mutual funds.”

As for the Brights, their future is, well, bright. So, don’t just save for your retirement date. You’ve got to build now for the other 20 or so years.