People may or may not learn from their own mistakes, but apparently, the idea that people learn from other folks' mistakes is a myth.

OK, maybe that's not fair, but it was hard for me to avoid coming to that conclusion when I was looking over an email from Fidelity's PR crew the other day. Every quarter, Fidelity data-mines its 401(k) records and issues a little report on trends in 401(k)-land. And while Fidelity always -- of course -- put its own corporate spin on things, its database of 11.2 million participants is big enough to be a pretty good indicator of what's going on out there.

There are a bunch of interesting data points in this quarter's missive, and I'll be writing more on some of them in the next few days, but one in particular jumped out at me on first read: In the second quarter of 2009, 8% of dollars contributed to Fidelity-administered 401(k) plans went to the participant's employer's stock.

That may not sound like a lot, but it's enough to worry me -- lots of 401(k)s don't offer a company-stock option, so that 8% number is a lot higher among people who actually have the option. Haven't those folks been watching the news?

Too many eggs, not enough baskets
As far as I'm concerned, holding your employer's stock in your 401(k) is one of the biggest mistakes you can make with a retirement plan. The reason is pretty simple: Even if you don't own a single share of your employer's stock, your financial exposure to the company is already huge -- you work there!

But it often doesn't look like a mistake to folks until it's too late. In fact, it might seem like a really good idea, especially if you work at a blue-chip like ConocoPhillips (NYSE:COP) or Procter & Gamble (NYSE:PG). After all, the odds that those companies will go the way of Enron seem really low.

Of course, that's what the folks at Bear Stearns said.

In all seriousness, I don't think either of those companies is going away anytime soon. (In fact, I think there's a decent case to be made for buying both of those stocks right now.) But that doesn't mean betting your future on their stock price is a good plan. After all, plenty of big names have gotten clobbered in the past year -- and in many cases, their employees' 401(k) balances got clobbered as well:

Company

Percentage of 401(k) Assets in Company Stock

Decline From 52-Week High

Bank of America (NYSE:BAC)

31%

57%

ConocoPhillips

50%

48%

General Electric (NYSE:GE)

56%

53%

Alcoa (NYSE:AA)

20%

58%

Target (NYSE:TGT)

46%

29%

Procter & Gamble

93%

29%

Sources: Yahoo! Finance, Brightscope.com. Data as of Aug. 13.

For comparison, the 401(k) stalwart Vanguard 500 Index Fund (VFINX) was down about 22% from its 52-week high. And with a little work, it's not hard to outperform the S&P 500 over time while staying well diversified.

But most of those stocks will come back!
Maybe so. But imagine if you'd been working for GE for the last 30 years and investing the majority of your retirement savings in GE stock. You would have been feeling pretty good about things -- until the past year or so.

Now imagine that you're retiring in a month. See, this is where even great companies' stocks can end up being a retirement disaster -- because even great companies hit rough patches. And sometimes not even a dramatic comeback will save you. Ford (NYSE:F) stock has been going gangbusters since the market lows in March -- but it's still down more than 11% from its 52-week high and more than 60% from its levels in 1999.

And if you'd been investing all of your 401(k) contributions in Ford every month for the past 15 or 20 years, and you were looking to retire soon, you'd probably be pretty unhappy with the overall performance of your portfolio. When there are so many great stocks out there, are you really willing to bet your future on your employer's?

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Fool contributor John Rosevear owns shares of Ford. The Fool owns shares of Procter & Gamble, which is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.