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Many new investors are making this old mistake—what to do instead

August 11, 2020

As the coronavirus pandemic took hold early this spring and markets plunged, a wave of Americans saw an opportunity to start investing. But one expert says this new herd is making some old mistakes — namely, chasing hot stocks.

“I’ll say it: Individual stocks are terrible investments for people just starting out,” Christine Benz, the director of personal finance for investment research firm Morningstar MORN, -1.25% , recently posted on Twitter. “[W]e haven’t talked enough about how poorly many small investors are apt to do with individual-stock purchases, especially if they’re just learning.”

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