2: Common Stock Pitfalls that Can Lead to Big Losses

In some ways, investing resembles car maintenance. Most people are content leaving the task to professionals and getting regular checkups by a trusted mechanic. Others like to get their hands dirty and to work on their cars. If you’re like many beginning investors, you probably don’t want to do the heavy lifting required to analyze specific stocks so you’re better off investing in a low-cost index mutual fund or exchange-traded fund (ETF) managed by professionals. However, you eventually may outgrow these investment vehicles and want to start investing in individual securities. Although this can be a laudable endeavor, doing so involves many pitfalls that can lead to big losses.