Money Forum World

Karen Hubbard · Joined: 08 Nov 2007 Posts: 2133

I started investing money in stock for the company that I work for. it looks to me, that really I'm losing money from the beginning, figure this out for me, I dont want to lose money.
I am purchasing stock at the going rate minus 10%, but purchasing with american dollars and it's a European stock, so it gets moved to Euros before it's bought. Now, I have to keep the stock for a minumum of two years before trading or cashing it in, or I lose the 10% plus any fees for handling, and it gets moved back to U.S. dollars. Am I a fool to keep purchasing this stock?

U.S. dollars invested: 674.71
Euro Equivalent FX rate 1.3097 515.16
Shares bought 10.1760

First day of offering Sept 1,06 Euro $ 41.57
Last day of offering Feb. 15,07 Euro $56.25
My buy price Feb 15,07 Euro $50.625

Is this a good investment? Or am I a fool? am I supposed to get out now, and start putting my money into a Roth. My company doesn't have any money paired IRA or 401k. Any help pleas

B&B · Joined: 08 Nov 2007 Posts: 2095

There are many factors that influence how good an investment this company is for you. Like many investment decisions, some of the factors are emotional, and are probably to bring trouble due to emotional content.

These factors I could think about before making an investment in the company:

1 Do I have a financial cushion to let me to manage an emergency or job loss?

If not, then #1 priority should be to gather liquid money till you do. How most of a cushion? Opinions differ, but seem tobe in a range of three months minimum up to one year.

2 Am I diversifying my investments? Is this the only money I'm investing, or is this one part of a broadly established portfolio?

The stock in a company is frequently influenced by the same factors that force a company to lay off workers or cancel projects and product lines. You may lose your job at exactly the time the stock market price falls.

3 Can I pay for to lose this investment?

I could never propose inventing more in the company than you may be able to pay for to lose.

4 Is this investment liquid? Can I sell at any point, or am I prevented by holding period or blackout dates from selling this stock whenever I choose? Am I considered an insider on this stock?

As an employee, you may can access inside info. In the US, it's illegal to trade a stock on such inside info. That may be ANY info, good or bad, that assists or hurts the stock price.

5 This is a more emotional issue. how do you feel about owning shares in the company? Will it worry you, or will it feel that youve bought a ticket to the game? Is it motivating to feel like you may be able to personally influence the value of your investment, or will it be demotivation because your stock, and your job, are both out of your control?

Personally, I have generally favored owning some stock in the company I work for, but I could never bet my personal future on it. Stock alternatives are different, but this isnt alternatives.

It sounded like this may have been an Employee Stock buy Plan, where you may be able to purchase stock at discounted terms with some restrictions on when you may be able to sell. If I'm troubled by what I interpretted to be a two year holding prerequisite.

Be cautious. Know what you're committing to. This is a risk more than an investment, so dont risk more than you're comfy losing.

Big Inc. · Joined: 08 Nov 2007 Posts: 2120

getting stock at a 10% discount is a great deal not offered many places anymore..as long as the stock is performing well, id keep doing this

Corrine Lane · Joined: 08 Nov 2007 Posts: 2056

what your doing is good though Id like to see you purchase more near to the 50 or 200 day moving average of the the stock so that you may get the stock at a better price instead at the peak as you did. or purchase many times throughout the period to lower your buy price, or add to position if you bought comparatively low