Remember Enron? Or Global Crossing? Or World.com?

I bet the people who owned stock in any of these failed companies recalls the experience.

The run-up on Wall Street during the 1990's gave investors, especially employees of companies who invested heavily in those companies via their 401(k) plans, a false sense of security. When the market went up, as it did for most of the decade, everyone made money. But when the dot.com bubble burst, and the Enron's of the world were exposed as fraudulent companies with artificially high stock prices, all of those 401(k) investors who poued everything into the company were left holding the bag.

Ouch.

So, half-a-dozen years later or so, what's the company stock ownership landscape look like? And how much should technology industry employees invest in an industry that's famous for its financial volatility?

First educate yourself on the myriad ways you can invest in your company's stock.

In most cases, employees are given the option to invest in company stock through their 401(k) plans.

Many firms offer incentives to encourage employees to purchase company stock—for example, you may be able to purchase the stock at a discount from the current market price, or your employer may offer a better matching contribution if your contribution goes to the purchase of company stock.

In addition, some employers that make matching contributions to 401(k) plans do so using company stock rather than in cash.

As a result, it is not difficult for investors working at these companies to wind up with a large percentage of their investment holdings in the stock of their employer.

Once you determine your options, how do you decide if company stock is a solid investment for your 401(k) plan? As usual, there are plenty of pros and cons.

On the "plus" side are the incentives - - what your company will give you to encourage you to invest in company stock. Employee matching plans, company stock options, and other incentives are difficult to pass up. Then there is the familiarity angle -- you most likely are knowledgable about the condition of your company—if you work for a solid company that has strong growth potential, you might make a big pile of money.

But there are, of course, no guarantees on Wall Street. If your company heads south financially, like Enron or World.com did, you're out of luck. Worse, you are already dependent on your employer's future for your job security. If something were to happen to the company and you lose your job, it would only compound your loss if your 401(k) plan's value was affected as well.

Double "Ouch".

Also, always look for "red flags". For example, you should be aware of any restrictions in your ability to sell shares—some companies, for instance, may restrict your right to sell shares before you turn 50 or for some specific period of time. And any presure from corporate muckety-mucks to buy company stock is a big no-no. If you have any questions, bring in an outside observer to run the numbers for you. Any stockbroker or financial advisor would be glad to do it, and for free in many cases (after all, they want your business).

Most financial planners tell their customers to act judiciously when it comes to owning companys tock. One rule of thumb is to own no more than 10% or 15% of company stock in your investment portfolio. A lower allocation will cushion the blow if an Enron-like debacle transpires.

In the end, just use common sense. You wouldn't want your retirement funding to come down to whether or not your company's long-term fortunes pan out. Some do and some don't.

So be cautious, diversify your holdings, and act accordingly.