You face several risks as an investor. One of the biggest is having to get at your invested cash at an inopportune time.

As recent market fluctuations remind us, stocks move in two directions -- up and down. Even if you think you own the best possible company, purchased at the best possible price, the market may very well have a different idea -- at least in the short term. As investors in these companies have found over the past year, the market can do some damage:


Market Cap
(in Billions)

TTM Earnings
(in Millions)

TTM Stock Drop

Toyota (NYSE:TM)




Starwood Hotels & Resorts (NYSE:HOT)




Time Warner (NYSE:TWX)




Bank of America (NYSE:BAC)




AstraZeneca (NYSE:AZN)




Home Depot (NYSE:HD)




Kohl's (NYSE:KSS)




TTM: Trailing 12 months.

Even investors in profitable, multibillion-dollar companies can see losses over the course of a year. As a result, if you want to invest successfully, you need to:

  • Be committed to it for the long haul.
  • Use only money you won't need any time soon.
  • Have a savings buffer to cover life's unexpected twists.

Get your house in order
The toughest part of investing has nothing to do with digging through annual reports or the mechanics of stock selection. The toughest part is coming up with the regular infusion of cash to invest in the first place.

Yet it's critical that you do so.

Unless you're already rich, it'll take decades of compounding your regular contributions to get you to your first million. That's true whether you can save just $100 a month or a respectable $1,000.

The issue isn't how much you have to invest at any given time, but rather how regularly you can sock away the cash.

So commit to a plan. Investing, after all, is a journey -- not a final destination. 

And if you need help finding the cash, my colleagues Dayana Yochim and Robert Brokamp at Motley Fool Green Light can help. Every month, they show you ways of stretching each dollar further and digging up cash to invest that you never knew you had. To help make it even easier to find the cash to get started, you can try the service for the next 30 days, free of charge.

This article was originally published on Aug. 3, 2007. It has been updated.

At the time of publication, Fool contributor Chuck Saletta owned shares of Bank of America. Time Warner is a Motley Fool Stock Advisor recommendation. Bank of America is an Income Investor pick. Home Depot is an Inside Value selection. The Fool is thankful for its disclosure policy.