Comments on: Is Money's only 7 Investments that you need wrong?

By: edebitpay, llc

edebitpay, llc — Fri, 07 Aug 2009 06:30:15 +0000

Bonds are conventional and time tested practice of investment, all these days. Going forward, there can be better options too, for investments.

By: Rick Francis

Rick Francis — Fri, 30 May 2008 21:12:52 +0000

I guess it really depends on your goals and risk tolerance. Diversification sacrifices potential gains to protect against losses. If you buy index funds you aren’t going to get 100% annual returns… but you won’t get 100% losses either! Putting 85% into a single company is pretty risky even if your calculations indicate a company is a great value, companies can lie about their income and/or assets, new competitors can arrive, etc.
I’m becoming more conservative as I get older- and thus I am buying more index funds. If I get 8% (average) returns on my retirement investments I will still be able to retire comfortably. I could potentially take bigger risks and possibly retire in grand style… or I may end up working until I die. That last option is pretty grim though… so I’d be willing to settle for three star hotels and coach for my travels.

-Rick Francis

By: AJC

AJC — Wed, 28 May 2008 21:10:22 +0000

@ Moom – “Value” and “Fund” is an oxymoron To find true ‘value’, you really need to be looking at a very select group of underlying securities … but, that’s only according to me and Warren Buffett.

Speculating is a (Making Money 201) business – good luck with it (!) – it could be a great way to generate some income fast, IF your business (like all businesses) goes well.

BTW: What are you doing for Making Money 101 (your safety net) and what are you planning for Making Money 301 (wealth preservation)?

By: moom

moom — Wed, 28 May 2008 17:43:08 +0000

Well, it makes no sense to avoid small stocks by just buying the S&P 500. And their value fund suggestion is also good. Both small stocks and value stocks have outperformed the large cap growth that the SPX is dominated by over time. And rebalancing makes sense. But yes, I am a speculator and that’s not for most people.

By: AJC

AJC — Wed, 28 May 2008 12:24:38 +0000

@ Traineeinvestor – Go ahead, upgrade yourself to ExpertInvestor status Thanks.

By: traineeinvestor

traineeinvestor — Wed, 28 May 2008 09:40:32 +0000

I have to agree with you here. Diversification is for people who are unable or unwilling to assume the risk inherent in seeking out better quality/performing investments than those represented by the market as a whole.

By: AJC

AJC — Wed, 28 May 2008 01:12:17 +0000

@ Ruth – Diversifying is the way to go … for the average SAVER (that is, somebody who doesn’t have the inclination to invest) … but, for those who want to get rich, Warren Buffett (who also recommends Index Funds for the ‘Average Jody’) says that you should be prepared to bet the farm on a GREAT investment … his partner of many, many years (Charlie Munger) even went so far as to say he would put 85% of his investable assets into just ONE investment!

I just happen to sit closer to Warren/Charlie on this than to the CNN Money Brigade.

By: Ruth

Ruth — Tue, 27 May 2008 22:39:35 +0000

Diversifying is the way to go! Check out Steve Peasley’s podcast for the average investor. He offers great advice. He did for me!

[link removed]

By: AJC

AJC — Tue, 27 May 2008 22:26:09 +0000

@ Heidi – Content or drivel, it’s all in the eye of the beholder. But, thanks!

By: Heidi

Heidi — Tue, 27 May 2008 22:22:26 +0000

Thanks AJC. I’ve been pouring over your site all day and I can honestly say, yours is one of the most informative PF blogs. It is very surprising that it has come as far as it has, I remember visiting your site a few months ago and while interesting, wasn’t much content at the time. Keep it up!