Topic: How To Invest

What is Pat’s commentary for the week of June 2, 2015

Article Excerpt

One of the cardinal rules of successful investing is to invest mainly in simple, plain-vanilla investments. This rule limits your choices to two main categories: stocks and bonds. By confining yourself to these two investment categories, you still have all the investment choice you need. You also avoid the hidden risks and conflicts of interest that you’ll find in more complex products. The funny thing is that the promoters of complex investments describe the features of these investments as if they were benefits, disregarding the associated negatives. This marketing approach attracts investors who want to make a quick decision. These investors tend to accept the sales pitch at face value. Target-date funds provide an example. These mutual funds take advantage of the widely held view that bonds are inherently safer than stocks, so you should gradually shift your investments out of stocks and into bonds as you near retirement. Target date funds do this for you automatically. It appears that a..

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