From the Wall Street Journal, “Wall Street Lays Egg With Its Nest Eggs: Retirement Lessons of the Dumb Moves by ‘Smart Money’“
In the past week, Merrill Lynch’s Web site still displayed an article, “Understanding Your Entire Portfolio,” full of sensible advice. If shares in your employer’s stock are “a significant portion of your investments,” it said, “you’ll want to consider the potential impact of a falling stock price on your portfolio.”Physician, heal thyself.
At the end of 2006, Merrill employees had 27% of all their retirement money in Merrill shares. In 2007, Merrill employees lost $669.8 million on their holdings of Merrill, and so far this year, probably at least $400 million.
Over at Morgan Stanley, employees lost some $500 million on their 401(k) holdings of company stock in 2007 and appear to be down at least that much this year. At Lehman Brothers Holdings, employees saving for retirement lost “only” about $200 million on their own shares in the past year and a half.