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Old 11-28-2007, 02:08 PM
dknightx dknightx is offline
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Join Date: Apr 2005
Location: not dmk
Posts: 1,702
Default Should i stop my ESPP for more diversity?

Right now I am taking the max out of my paycheck (15%) and putting it towards my companies stock purchase plan. Its actually not even that good of a deal. It use to be 85% of the stock price at either the start or end of the period (whichever is lower), but NOW its only 95% of the stock price at the end of period.

Here's the problem, with ESPP it seems i get some decent tax benefits as the amount is taken out pretax, and if i hold the shares for a year I get taxed as long term capital gain instead of normal income tax (which is like a savings of 10%+ right there). Also, right now my companies stock is lower than it has been in the past, so it would SEEM like a good idea to stay in the ESPP until the stock is higher.

The main reason I want to leave the ESPP is that i've been in it for over 3 years (so i've accumulated a lot of stock alread), and i'm just now starting to diversify and would like to put a larger percentage of my paycheck into my etrade account (like 30-40%). Of course if I do that, it means I have to find investment opportunities that will do better than my companies stock + 5%.

Anyone facing/faced a similar situation?
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