I've told you about many of my investing blunders over the years, including the tale of how I lost $200,000 of my own money. Investing in the stock market can bring lots of rewards, but I certainly hope I haven't suggested that it'll always be easy.

Reader Rich Hill recently wrote: "I read your article about retirement and you make it sound like if you invest in the market, you will do well. ... I hate to think of the people who started investing a year ago and are now down 30% to 50%."

Good point, not to mention a good reminder that stock investing involves risk. In fact, people can suffer losses over much longer periods than a single year. Again, I can point to myself as an example:

  • I bought shares of Coca-Cola (NYSE:KO) some four years ago, and they were underwater for roughly two years. I'm now up about 14%.
  • I also bought into Wal-Mart (NYSE:WMT) four years ago, and I was in the red for more than three years. (I'm up 10% now.)
  • With the Home Depot (NYSE:HD) shares I bought in 2004, I'm still in the hole by a whopping 30%, after having been up as much as 30% at one point.

Words to my mother
Rich also wrote: "We have entered into some very scary times and I would be curious what you would have your mother invest in today??? I will bet you would advise her to stay out of the market altogether."

No, I wouldn't tell her to avoid the stock market. It's true that since she's retired, she might not want to put all of her money in stocks, because she might want to tap some funds to live off in the coming years. But then, I'd tell anyone of any age to keep all short-term money out of the stock market -- because of what can happen with great names such as Coke, Wal-Mart, and Home Depot. In the long run, stocks tend to go up, but in the short term, no one knows what will happen.

Yet even if she's in her 70s, your mom may well have several decades ahead of her. To cover rising living expenses, she'll need some of her money to grow -- and she'll need some time to let the stock market recover from recent losses.

The good news is that our volatile market is offering bargains to investors. If you think stocks such as Home Depot or Wynn Resorts (NASDAQ:WYNN) have a promising future, you're getting a chance to buy them for less than you would have paid last year.

Point by point
Rich made a few other points, and I doubt he's the only one with such sentiments:

  • "I am finding no matter what I do, I am not able to make an investment that will actually earn me money to live off." Well, one option is to invest in stocks that pay dividends, such as Altria Group (NYSE:MO), Merck (NYSE:MRK), or General Electric (NYSE:GE). They'll provide you with quarterly income to help you pay living expenses. Alternatively, lifetime annuities offer low-risk income, paid regularly for the rest of your life.
  • "You have to be a day trader or hedge operator to understand the market and make anything." In truth, day trading is rather dangerous and a good way to lose money. It's not investing -- it's just speculating.
  • "The U.S. is moving away from Social Security and pensions and forcing people to invest in the market, yet there is no way for people to learn to invest except by trial and error." That's true. We shouldn't count on Social Security to provide all that we'll need in retirement. And many of us don't know that much about investing, because we were never taught about it in school. Fortunately, it's never too late to learn.

So don't give up on the stock market. Learn about it -- but do so with your eyes open, with the knowledge that you can indeed lose some money.

Wal-Mart, Coca-Cola, and Home Depot are Motley Fool Inside Value selections. Find out how value investing seeks solid returns with less risk by taking advantage of our free trial offer for 30 days.

Longtime Fool contributor Selena Maranjian owns shares of Coca-Cola, General Electric, Home Depot, and Wal-Mart. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.