Investors Alter Behavior After Enron Collapse
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The Enron Corp. debacle has persuaded 72% of 401(k) investors to change their behavior in some way, although only 27% said they are diversifying their portfolios more, according to a survey conducted for brokerage Charles Schwab & Co.
In the survey, conducted by telephone Feb. 7 to 11, 33% of the 620 investors polled said they now avoid companies they don’t understand, and 31% said they do more research before investing. Also, 22% said they pay more attention to financial advisors as a direct result of energy giant Enron’s meltdown, and 15% said they worry more about their investments. The survey’s margin of error is plus or minus 4 percentage points.
Enron filed for bankruptcy protection Dec. 2, wiping out billions of dollars of investors’ equity and the 401(k) retirement funds of workers who had invested heavily in company stock. Financial planners said the company’s crash vividly demonstrates the need for 401(k) investors to diversify.
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Liz Pulliam Weston
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