Not A Stock Wizard? Avoid These Investing Mistakes, Part 4

Read about the common mistakes people make when dealing with stocks.
2 min read
Opinions expressed by Entrepreneur contributors are their own.

Better safe than sorry? A gentleman, about to retire, wanted to be sure he could maintain his lifestyle with his current investments. As he pulled out his retirement plan statement, his whole demeanor changed. "I can't believe I left all this money in a money market fund for the past six years," he said. "I could have done so much better if only I had invested a little of it in the stock market. I was just so afraid of losing it that I didn't do anything."

Certainly, this investor was justified in his fear of stock market fluctuations. There's always some measure of risk when investing in stocks and a chance you'll lose money. Unfortunately, however, thanks to the bite taken by inflation and taxes, you can also lose purchasing power in money market funds and other similar investments. Our investor didn't realize his money market fund was neither insured nor guaranteed by the U.S. government. Further, there's no assurance such a fund will maintain a stable net asset value of $1.

The moral of the story? To retire in the style to which he's accustomed, our investor may be forced to work longer or to invest more aggressively than he might have had he included a partial investment in stocks in his portfolio from the start.

More from Entrepreneur
Entrepreneur Select: A Fund For Entrepreneurs, By Entrepreneurs

Entrepreneurs require more than just money, which is why we aim to empower you, as well as act as a catalyst for value creation.

Entrepreneur Insider members enjoy exclusive access to business resources for just $5/mo:
  • Premium articles, videos, and webinars
  • An ad-free experience
  • A weekly newsletter
  • A 1-year Entrepreneur magazine subscription delivered directly to you
Whether you want to learn something new, be more productive, or make more money, the Entrepreneur Store has something for everyone:
  • Software
  • Gadgets
  • Online Courses
  • Travel Essentials
  • Housewares
  • Fitness & Health Devices
  • And More

Latest on Entrepreneur