which investor is making a common error?\n an employee of a popular hardware store who invests only in that…

which investor is making a common error?\n an employee of a popular hardware store who invests only in that company’s stock\n an employee of a popular software company who invests in many similar companies\n someone who sells the slumping stock while they are still able to make a profit based on what they paid\n someone who buys stock in both domestic and more risky international companies

which investor is making a common error?\n an employee of a popular hardware store who invests only in that company’s stock\n an employee of a popular software company who invests in many similar companies\n someone who sells the slumping stock while they are still able to make a profit based on what they paid\n someone who buys stock in both domestic and more risky international companies

Answer

Brief Explanations:

Diversification is key in investing. Concentrating all investment in one company's stock, especially when one is an employee of that company, exposes the investor to high - specific risk. If the company faces problems, the investor loses both their job and investment value. Investing in many similar companies, selling stock to make a profit, and diversifying between domestic and international stocks are more rational strategies.

Answer:

an employee of a popular hardware store who invests only in that company’s stock