Eventually the gains will substantially outpace the losses. You have to keep your finger off the panic button and your mind on the long-range plan. The impact of inevitable falls can be cushioned somewhat with a diversified portfolio. Whether you invest on your own or with a managed account such as a mutual fund, Grange says, you can diversify with a mix of stocks, bonds and real estate as well as domestic and foreign investments. Playing the stock market by yourself, however, may put you on the losing side of a Monopoly game.
Most investors are probably better off in mutual funds.
It takes tons of time and knowledge to properly monitor stocks, said economist Peter Bernstein during a national teleconference broadcast on campus. Money managers are in there all the time with armies of experts regularly analyzing the balance sheets of every company in their funds. The odds are against you unless you re a millionaire and you ve got some play money. It may not pay to risk everything in the stock market, but sometimes it pays to borrow money. You have to look at the time value of money, says Lown.