Under a GIC, sometimes called a stable value fund, an insurance company guarantees payment of a set rate of interest over a specified period of time. At these companies, participants have an average of over 28 percent of assets invested there. But conservative investments often earn less, so you lose out over the long run to inflation. Squeezing out just a couple of extra percentage points in return through more aggressive investing can make a big difference over time. Being wedded to company stock.
Many public companies match employee contributions with company stock.
With the stock market bull blessing so many companies with good fortune over the last few years, some participants might feel satisfied with the strategy. But those who work for stock market laggards, such as Digital or Wang, probably don t feel as fortunate. And loading up on employer shares could backfire if your company s stock plunges into a prolonged downturn. Lack of diversification . And they rarely spread their choices across a broad spectrum of asset classes.