5 Dumbest Statements in Investing

Last Updated Sep 13, 2011 9:53 PM EDT

I've been around the block a time or two, and over the years I have heard many of the dumbest statements ever made about investing. They all have one thing in common, two things if you count that they are wrong - they were made by "experts" who sincerely believed they were correct. Here are some of my favorites along with why you should never fall for them.

Read each one and figure out why it's so dumb. Then turn the page for my explanation.

# 1: You are overly diversified

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    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.