What are the “must not’s” of personal investing?

As chief strategist/consumer education for Charles Schwab & Co. Inc., Schwab-Pomerantz is a leading advocate for individual investors. She speaks and writes extensively about personal finance issues and is a driving force in the movement to improve financial literacy in America. As president of the Charles Schwab Foundation, she also oversees the company's philanthropic strategy and resources.

With her father, company founder, chairman and CEO Charles R. Schwab, Schwab-Pomerantz co-authored "It Pays to Talk: How to Have the Essential Conversations With Your Family About Money and Investing," which Publishers Weekly called "a well-rounded primer that provides one-stop shopping for the many phases of financial understanding and planning."

Schwab-Pomerantz is a sought-after speaker whose public appearances have included appearances on "The Today Show," CNBC and NPR. In 2001, Working Woman magazine recognized her as one of four “Market Movers” in America who are “rewriting the rules of finance,” and she was also recognized as one of the “25 power Elite” in the financial services industry by Investment News. For four consecutive years, The San Francisco Business Times has named her one of the San Francisco Bay Area’s 100 Most Influential Women in Business.

A graduate of the University of California, Berkeley, with a bachelor’s degree in Political Science, Schwab-Pomerantz later earned a master’s degree in business administration from George Washington University. She holds NASD Series 7, 63 and 8 registrations. 

  • Transcript


Question: What are the “must not’s” of personal investing?

Carrie Schwab: Okay, here are couple of must not do’s.

Never have more than 20% of an individual stock or industry in your portfolio. You are taking on too much risk and those of us who work for the large corporation and we get the companies stock, we get very close in intimate with that stock and we have a very hard time paring it back and selling it.

So you think about employees at Enron or World Com. Unfortunately they were so well with that stock, but the stock and the company weren’t well to them. So, don’t take kind of risk. Just to have no more than 20% in your companies stock or any of your favorite stock.

Again, don’t time the market. Don’t getting in and out or let your emotions get in a way of successful investing.

Create that diversified portfolio that reflects your risk tolerance that again your timeframe. Assuming as a good solid portfolio, you should be able to arrive the ups and down of the market.

Today with sub prime market and lot of people are very scared right now, but we have had these down markets historically many times, since the beginning of the stock market it’s just part of the make up of it.


Recorded on: March 27, 2008