Question

Why are single stock so dangerous as investments? Can you provide current market examples that have the potential to destroy portfolios based on single stocks? (name the stock)

Why should you be debt free before you begin long-term investing?
If you could create the perfect mutual fund, what companies would you put in it?

Answer 1

There are two rules to investing. Rule number one, don’t lose money. Rule number two, see rule number one.” Individual stocks are far riskier than a well-diversified basket of stocks. According to Cambridge Associates, during the 10 year period ended June 30, 2013, 55 stocks in the S&P 500 lost at least half of their market value.

Step-by-step explanation: