Is it a good idea to opt for an Employee stock purchase plan,the plan provides a 5% discount from the trading price on the purchase date..its a financial institution with a relatively stable trading range,not a big upside but has a dividend yield of around 4%..

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If you are able to sell in the medium term then may be worth it to cash in on quick 5%. Or if this is the only way to access tax preferred savings opportunities (e.g., 401(k) is only company stock), then could be worth it. But otherwise not a great idea if this is just one investment option in a retirement account.

Not only will your money be tied up in a non-diversified asset, that asset is highly correlated with your income. So if the firm struggles, you could potentially lose retirement savings and your job in a layoff. Better to invest in standard diversified portfolio.

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Got it, then comes down to how quickly you can sell. If there are limited restrictions, can buy at 5% discount then sell as fast as possible. But wouldn’t recommend buying and holding. T-bill rate is over 5% so you can get 5% risk free over a year, no sense in doing this if you need to hold for a year+

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