Despite these risks, the stock market has given an average annual return of 12% over time [1]. The risks to an investor of individual stocks or industries failing can be mitigated by investing in a large number of stocks in multiple industries (diversification), so poor performance in one area will be countered by good performance in another. Mutual funds offer “instant” diversification; the extreme of diversification is simply buying an index fund to match the performance of the market as a whole. While market downturns may result in short term losses, it is virtually impossible to lose one’s entire investment with a well diversified portfolio.