1. Should Investors form their own blend of stocks and bonds?

2. How should you decide how much of your portfolio should be in stocks?

3. $1 invested in the S&P500, from 1925-2005, increased in value $2,658, a 10.4 percent per year increase.

4. Treasury bills are guaranteed by the federal government.

5. Is the risk of being 25 percent greater than the risk of being 15 percent poorer?

6. People hate losses twice as much as they like gains.

7. Over twenty years of time, stocks are bound to go up. There is no twenty year period in history in which stocks have been outperformed by bonds.

8. Many investors do not heed good advice and fail to invest more in stocks. Shown the risks between stocks and bonds over a long period of time, such as twenty years, they choose to invest nearly all their money in stocks.

9. If stocks fall, it is another buying opportunity because the stocks quickly rise again. Perfect market timing would create impossible accumulations of wealth.

10. In general diversification is a good idea, but there is a difference between sensible diversification and naïve kind.

11. Benartzi and Thaler examined the behavior in retirement savings plans, found the more stock funds the plan offered, the greater percentage of participants’ money invested in stocks.

12. Charlie Prestwood in 2000 had accumulated 13,500 shares of Enron stock, worth $1.3 million, at peak. At age sixty eight, Prestwood had lost his Enron stocks and now receives a monthly, $521 pension payment and $1,294 from social security. Five million Americans have 60 percent of their stock in their company.

13. Employees do not seem to understand the risk and return profile of company stock.