For many investors investing in their company’s stock makes sense. After all, you are an insider and it makes you feel like you know what is going on in the company. If anything were to go wrong you would be the first to know right?
Or, you may think that you are doing great and your division is doing great, so it is safe to assume that the company is doing great right?
Or, you have had meetings with your Human Resources Department and Manager and they have assured you that your company is not like “those” other badly managed companies. These may be some of the thoughts that may go through your head as you pour more money into your company’s stock. But are these thoughts rational or are you getting blindsided?
As investors, we know or should know that we need to be as rational as we can be when it comes to investing. After all, investing is about taking measured risks and looking at the numbers. Unfortunately for many of us it is quite difficult, if not impossible, to remove emotions from our decision making. And when it comes to investing, our emotions can sometimes have a detrimental effect in our portfolios.
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