October 4, 2014

What was Enron and why should you care? What HUGE mistake did their employees make when handling their 401(k)?

2 thoughts on “October 4, 2014”

  1. Garrett Haag says:

    Enron was an energy company that was ran by many corrupt people, the people in charge cooked the books and made the company seem much better then it really was. The stock price rose like crazy due to fake information being generated by the company and the accounting firm they had working for them to falsified documents. There employees got cought up in the bubble the company had created and put their 401k in to company stock, and only company stock for the most part, so they had all there eggs in one basket and relied on Enron for there employment and retirement. The moral of the story is to avoid bubble and avoid individual stocks because anyone could be the next Enron.

  2. Mike Finley says:

    Another good answer, Garrett. Let’s review.

    Enron was run by a bunch of crooks who “cooked” the books and ended up running their company into bankruptcy. The stock price ended up at 0. The mistake many Enron employees made was the same mistake far too many people are making today. DO NOT sell your diversified mutual funds in your retirement account and buy one stock, in this case Enron stock.

    It is incredibly important to know your history when it comes to investing your money. Here is more on Enron:https://www.youtube.com/watch?v=Mi2O1bH8pvw. Know your history and that means getting rid of your individual stocks and buying broadly diversified index mutual funds that spread your risk throughout the world. NOT in one company!

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