Your elderly relatives investments missed the market return of the S&P by 6.5% over the last 40 years.  Bre-X, Nortel, and Valeant are 3 companies out of a thousand that proved to be terrible investments.  If you stick to a 5% of holdings rule the failure of these companies, if you owned them,  wouldn't have hurt your overall holdings that much, if at all.    Let's not use a few bad apples to deter proper investing.  Do not be scared of the markets Doug.  Learn about margin of safety investing and avoid the perceived "home runs".