Don't gamble on stocks if you can't afford to lose your stake

— -- Q: Is it a good idea to invest the $40,000 I plan to use in two years to add onto my house in a risky stock? That way, maybe I can afford a bigger addition?

A: That's exactly the kind of thinking that puts people in the poorhouse, rather than in a bigger house.

If the recent bear market taught investors anything, it's that the stock market can be extremely unpredictable and vicious in the short term.

Disruptions to the financial system can cause the value of stocks to decline precipitously, so that it can take years to simply get back to even. Don't just take my word for it. An Ask Matt reader noted in a recent question just how far they are from just breaking even despite the market's rally that started in March.

You need to be braced for this extreme volatility, especially if you're considering a risky stock. Remember that during the last bear market, some stocks declined more than 80%. Are you prepared to see your $40,000 turn into $8,000?

Certainly, you might hit the jackpot and double or triple your investment. But risk cuts both ways. You need to weigh weather your happiness with a larger addition would outweigh your disappointment if you wound up losing your money and not getting any addition at all.

Personally, I'd opt for the safety of knowing my $40,000 is safe and plan my addition with that budget in mind. But if you're a gambler and willing to lose everything for the chance of a gain, that's a decision only you can make.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns. Follow Matt on Twitter at: twitter.com/mattkrantz