MY DUMBEST investment was when I bought shares of Ambac Financial. It turned out to be my best lesson on the dangers of "emotional investing." I thought I was catching it on the upswing, but I ended up getting an uppercut instead, as it fell faster than I could regain my balance. I quickly realized that the market reacts much faster than I can, and that a sure-footed investment strategy is a much better plan.
- T., online
THE FOOL RESPONDS: This bond insurer ran into trouble in 2007, largely due to involvement in mortgage-related securities, and filed for bankruptcy protection in 2010. As is often the case, many people bought shares as they fell, not imagining that the shares could fall further.
