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Don’t Make Me Say I Told You So 155

There are many stocks and companies that have not grown
along with the markets, or have disappeared entirely over that

period of time. Think about family fortunes concentrated in
these stocks over the last 50 years:

► Bethlehem Steel ► Polaroid

► Eastman Kodak ► Wachovia Bank

► Enron ► Washington Mutual
► Lehmann Brothers ► Woolworth’s

► Pan Am ► Xerox

According to an article titled “How to Stay Rich” in a leading
financial publication, “A single stock position has a less than 50%

probability of sustaining wealth over 20 years. But a diversified
1
portfolio increases the probability to 85%.” One of the most
common mistakes that individual investors make with their
investments is the failure to diversify, particularly when it comes

to investments in stocks. Many wealthy investors make the
same mistake as the average investor when it comes to having

too much of their wealth concentrated in a single investment,
stock, or mutual fund.

Although I believe that your portfolio should have a
significant percentage in stocks, you should spread your money

over the three major asset classes: stocks, bonds, and cash or

Chapter 4: The Most Common Investor Mistakes