Hey Sylvia, Quick Question: Can I Lose Everything in the Stock Market? (Video)

By Dr. Sylvia Kwan

Sylvia Kwan has nearly 35 years in the investing industry, as well as a PhD in engineering economic systems from Stanford, and she helped build Ellevest from the ground up as our Chief Investment Officer. So you could say she knows a thing or two about investing. We decided to bottle up some of that golden knowledge for you in our new video series, “Hey Sylvia, Quick Question.”

Up next: Can I lose everything in the stock market?

Sylvia’s answer:

You can lose everything in the stock market if you put all of your money in a single stock. And that’s because no one can predict how markets will perform, let alone a particular stock.

So, let’s look at a recent example: Sears. Sears was started in 1892 and grew to be one of the largest retailers in the US by 1989. In October of last year, 2018, Sears filed for bankruptcy. So yes, if you had put all of your money in Sears at its high, you would be virtually left with nothing today.

So that’s why it’s important to diversify — to have an investment portfolio that’s invested in many different stocks of different industries, different geographies, as well as bonds and alternatives. Doing so helps protect your investment portfolio against unforeseen events that impact a particular stock.


© 2019 Ellevest, Inc. All Rights Reserved.

Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives, provide you with a given level of income or reduce portfolio risk.

The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities, and should not be considered specific legal, investment, or tax advice.

The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person.

Investing entails risk, including the possible loss of principal, and there is no assurance that the investment will provide positive performance over any period of time.

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Dr. Sylvia Kwan

Dr. Sylvia Kwan is the Chief Investment Officer of Ellevest.