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bamafinest1985
Alabama Fan
Gadsden
Member since Dec 2012
19 posts

401k question
30 years old. I've been working for publix going on 3 years now. I started my 401k as soon as it was open for me to do so. Publix roughly gives each full time employee 8.5% of there yearly pay in stock each year. So I've already have over 160 free shares (priced at 36.85 each right now and each quarter it pays a 0.23 per share dividend). My question is should I put a majority of my 401k into publix stock while I'm semi young and maybe change it later on down the road to be more conservative ? Right now I'm spread out 25% between 4 different options.
This post was edited on 2/8 at 3:49 pm


slackster
Stanford Fan
Houston
Member since Mar 2009
37814 posts
 Online 

re: 401k question
From a risk standpoint, why would hitch your retirement savings to the fate of the company for which you work?

ETA - that's not a rhetorical question, and I'm not being a dick, just to be clear. How you answer that question should give you the guidance you need.

ETA.2 - A company stock that has underperformed the S&P by nearly 100% since the recession.
This post was edited on 2/8 at 4:04 pm


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90
Moots
LSU Fan
Gonzales, LA
Member since Nov 2007
895 posts

re: 401k question
I think the old adage of "Don't put all your eggs in one basket" strongly applies here...

I'd definitely work on trying to diversify.


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60
TigerintheNO
LSU Fan
New Orleans
Member since Jan 2004
29250 posts

re: 401k question
Remember those Enron employees who lost their jobs and retirement savings the same week.


bamafinest1985
Alabama Fan
Gadsden
Member since Dec 2012
19 posts

re: 401k question
Thanks for the responses, and yes I've always heard to diversify when it comes to my 401k. When I first came the publix we were told that it would be wise to invest all of our 401k into the publix stock by a lot of the higher ups. I will say that the stock has done very well in the past and its well known a lot of people have retired early due to it. My department manager showed me his dividend check at some point last year and he was getting over 8k every quarter just from the stock. But thanks again for all the replies, I think ill just stick to what ive been doing


LSUcam7
SRB FL
Member since Sep 2016
530 posts
 Online 

re: 401k question
quote:

wise to invest all of our 401k into the publix stock by a lot of the higher ups


That is some old school upper mgt shite right there.


bamafinest1985
Alabama Fan
Gadsden
Member since Dec 2012
19 posts

re: 401k question
Seriously! At orientation that's all they really talked about, how rich they are from the stock.


Weagle25
Auburn Fan
THE Football State.
Member since Oct 2011
32567 posts

re: 401k question
Publix plummets and you lose your job and retirement. That's the whole reason for diversifying.

Also, I never trust someone selling something to me when they have something to gain from me buying. They may be right but I'll do my own research.


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30
tigers1956
LSU Fan
baton rouge
Member since Oct 2008
1654 posts

re: 401k question
Blue bell employees lost 33% of their esop stock when the Listeria hit....they haven't received any company stock since then


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BPTiger
LSU Fan
Atlanta
Member since Oct 2011
525 posts

re: 401k question
If your entire account is in any stock you are leaving the door open for disaster. I’d be especially concerned about public, Kroger, etc. with what Amazon is doing.

In other words, Jeff Bezos might raid your 401k.

On another note, I’ll give a round of applause to publix for giving or matching 8.5%. That’s a big number.


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30
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USA
Member since 2001
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slackster
Stanford Fan
Houston
Member since Mar 2009
37814 posts
 Online 

re: 401k question
quote:

I will say that the stock has done very well in the past and its well known a lot of people have retired early due to it. My department manager showed me his dividend check at some point last year and he was getting over 8k every quarter just from the stock


Yeah, that has more to do with 8.5% of your salary buying stock non stop than Publix being a world beater as a stock. As I mentioned earlier, they've significantly underperformed the market since their last split in 2006. I haven't looked back further than that though.


Twenty 49
LSU Fan
Shreveport
Member since Jun 2014
8275 posts

re: 401k question
Lucent was an AT&T spinoff.

Many folks in Shreveport worked for them and put most or all of their 401k in company stock. The company actually counseled employees to diversify, but employees wanted to ride the hot rocket.

At first, they looked like geniuses:

quote:

In only six years its stock price rose from $7.56 per share to a high of $84 after multiple stock splits, and then crashed to a 2002 low of 56 cents.

Individuals’ company 401Ks sank to near worthlessness ... Retirees had to go back to work. Unexercised stock options became wallpaper.


LINK


LSU
LSU Fan
Houston
Member since Oct 2003
7249 posts

re: 401k question
quote:

Remember those Enron employees who lost their jobs and retirement savings the same week.


I work with several of those guys that are still working in their 60’s as a result.


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Teddy Ruxpin
LSU Fan
Austin, TX
Member since Oct 2006
31094 posts

re: 401k question
quote:

Yeah, that has more to do with 8.5% of your salary buying stock non stop than Publix being a world beater as a stock. As I mentioned earlier, they've significantly underperformed the market since their last split in 2006. I haven't looked back further than that though.


He's inadvertently entered the whole dividend vs total return debate. Though I imagine if Publix has done that bad, it's not much of a debate in this case.


slackster
Stanford Fan
Houston
Member since Mar 2009
37814 posts
 Online 

re: 401k question
quote:

He's inadvertently entered the whole dividend vs total return debate. Though I imagine if Publix has done that bad, it's not much of a debate in this case.



Even then, Publix dividend yield is like 2.5%, not far off of the S&P.

The bulk of their wealth was accumulated through the early 2000s. Since then, the stock has underperformed. The reason people can are accumulated wealth now is mainly due to the company giving 8.5% of your salary in stock.

Saving 8.5% of your salary in most assets will accumulate wealth over time, even if they underperform.



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10
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
37416 posts

re: 401k question
quote:

At orientation that's all they really talked about, how rich they are from the stock.


Well, Publix has done well so far. Of course they are well off.

Nobody knows whether Publix will do so well going forward.


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The Torch
LSU Fan
DFW The Dub
Member since Aug 2014
5791 posts

re: 401k question
Diversify

At your age you should put as much as you can afford in a stock based 401K, most companies will match up to 3%.

Let it ride and don't pay attention to ups and downs, over a 35 year span it should average 6-8% growth.

I never even look at my statements.

Torch - BS Finance



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10
Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
709 posts

re: 401k question
Is that an ESOP that's in addition to a (matched) 401k?


dawg4lyfe
Atlanta Falcons Fan
Member since May 2012
10616 posts

re: 401k question
Yep. According to my manager, every $360 you make you receive a share of publix stock.


Double Oh
Louisiana
Member since Sep 2008
6129 posts

re: 401k question
Do you have to take the stock every year or can you request they put cash in your 401K?


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