Investors: Tread Carefully In Stock Market

April was a great month for stocks.

The S&P 500 was up 37 percent from a 12-and-a-half year low on March 9. It was also up 2.9 percent in 2009. President Obama says he sees economic "green shots" sprouting in the recession.

But before you jump back in too quickly, there are three common money mistakes you need to know.

CBS MoneyWatch.com's Jill Schlesinger explains why you shouldn't just dive in.

"We're still talking about a risky asset," she said. "The stock market, have we learned nothing in the last two years, for goodness sakes? Really, this is high-risk stuff and it's very important to remember that."

What are the three most common mistakes that people make?

"I would say number one, which is really interesting, the thinking like, well, 'the stock market's up, I'll just dive right back in.' Well why are you going to dive in just because the stock market is up?" she said.

According to Schlesinger, there are questions you should ask yourself, such as, "Should I really be buying stocks right now? Has my risk profile changed? My time horizon changed? And if I'm sitting on a pile of cash, what's my actual plan to reinvest it?"

"In other words, you're just going to buy because we're at a higher level than we were three months ago? Makes no sense," she said.

Who should be investing in the stock market?

"I think that anyone who has that good time horizon," she said. "You don't need your money for 10 years. You understand the risk to have a diversified portfolio. Of course that makes sense. But it is not realistic to count on this rising stock market to do all of that heavy lifting for you."

The second biggest money mistake Schlesinger says is "you have to be in charge of your own finances."

"You have to be self-reliant," she stressed. "I can't stand it when people say, 'Oh, my house will go up in value, my stocks will go up in value. That's how I'm going to pay for this.' No, no, no. My mother always likes to say you've got to take care of yourself. She's also fond of saying what's his is mine and what's mine is mine."

The last mistake Schlesinger says is "don't fall prey to big, huge marketing schemes."

"I'm going to tell you that right now for the last year and a half brokers have not been calling their clients," she said. "They've been hiding under their desks. They're calling again because the stock market is up and they know they can really get back in.

"If you see a big ad for a mutual fund, say to yourself, 'today's winning fund could be tomorrow's loser. I could be buying next week's loser.' Be very careful about that.

Schlesinger also points out the importance of knowing yourself - "know your risk tolerance. Have a good time horizon. And just because the market's up doesn't mean you just jump right back in."

A game plan is so helpful in this respect, Schlesinger adds.

"If you have a way to say, 'OK, how am I going to reach my goal? What is my goal? And what are the steps I'm going to take to get there?' That will drive you," she explained. "That will get you to the right place. And you won't fall prey to your emotions.

"And finally I want to say one very clear thing: There is no magic man behind that curtain. There is no wizard. Nobody knows the magic of when the stock market's going to go up or down. If you can really get comfortable with that fact, there's uncertainty in this, and be comfortable with the risk, you will be a more successful investor, but stop trying to find the ultimate answer. There is none."