What if you told me to pick just one stock to invest my entire nest egg in today, and hold only that stock ticker for the next five years? Honestly, I would have asked you to go get a third cup of coffee and some better jokes. That's not how investing works.

That idea only makes sense if you're entrusting your long-term financial health to a naturally diversified collection of different stocks with microscopic expense ratios, such as the SPDR Dow Jones Industrial Average ETF Trust (NYSEMKT: DIA) or the Vanguard 500 Index Fund ETF (NYSEMKT: VOO). But that's kind of cheating, for the purposes of this brain-teaser challenge. With these two exchange-traded funds, your results will actually depend on the fortunes of 30 or 500 companies, respectively -- not just one. But that's what it takes if you have to entrust your savings to just one ticker symbol.

You see, parking all your life savings in any single stock, bond, cryptocurrency, or real estate parcel can be bad for your financial health. No business is ever completely risk-free, and you should always be prepared for something to go terribly wrong. That's why my friends and colleagues at The Motley Fool wholeheartedly suggest building a portfolio of at least 25 individual stocks, and holding on to each one for at least five years. That way, other companies can pick up the slack when some of them are struggling.

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Source Fool.com