Drained Battery

My dumbest investment? I lost 100 percent of the money I put into a battery company. It made the biggest batteries in the world, mainly for ships. How could I go wrong, right? Well, I didn’t look at the company closely or look up any news on it. All I listened to was the advice to invest in it.

It was a Chinese company that cooked its books and had been in trouble with the SEC. Then, when the Chinese stock market crashed, my money went down the drain, permanently. The company no longer exists.

Now I’m more careful, to say the least. I follow Fool stock recommendations, but mainly just to get ideas of companies to investigate. I do a lot of my own reading on the companies to learn what they make, what they contribute to the world, whether people really want or need the products, whether they might survive for the long term, etc. Now I’ve been making about 50 percent a year.

My investment strategy at the moment is to take chances on stocks that I think will grow briskly, but when I do so, I invest the same amount in stalwart blue chip companies, too, or in a mutual fund with bonds. — L.W., Saratoga Springs, New York

The Fool Responds: You’ve improved your investing process immensely, though 50 percent returns are not normally sustainable. Balancing your riskier investments with less risky ones is smart.