Has it ever occurred to your mind to buy stocks of the company you are working for? You should better think about it again. There are at least two reasons for you not to purchase company stocks.Portfolio Diversification
If you are somebody young, chances are you do not have much access to investment money. As a general rule, young investors should first strive to have a diversified porfolio, since portfolio risk is reduced this way.
Since company stocks are usually bought automatically through plans made out by your employer, there is no doubt that your portfolio will be dominated by company-owned stocks overtime.
Risk Diversification
In a related reason, it also pays to be diversified when it comes to the sources of your financial risk. If you already depend on the company for your regular wage, you wouldn't want to double that risk by putting your investments on the company as well.
You see, if the company you are working for unfortunately falls down, there is the chance that you'll get fired. In addition to that, all your investments in the company will be also slashed down in value. Now get your calculator and find out how much you will lose that way!
Reference: http://www.youngmoney.com/investing/faq/Company_stock_no
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