Portfolio diversification

Enron employees were heavily invested in Enron stock through their 401(k) plans. While companies frequently provide a match in the form of company stock, employees are typically free to move the money to an alternative investment. This was true at Enron as well, but most employees chose to leave their money in company stock.

Many investment experts contend that despite all of the legal and ethical lapses by those in charge of Enron, they were responsible for inflicting suffering on relatively few employees when the company failed. It was not the company's fault if employees did not choose to diversify.


Do you agree with the above statement?
Please justify your answer using at least one journal article


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Finance Basics: Portfolio diversification
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