By Craig Erwin, Ph.D.
Photo by Cody Portraits on Pexels.com
In their May 22nd issue, Investor’s Business Daily shared some horror stories from professional money managers. In the first, a man learned that his wife, who managed their money, had a spending problem which had wiped out the kids’ college funds. He also learned that the mortgage was not paid off (as he believed). In fact, his wife had taken out a big second mortgage. Pretty scary!
In another case, a married couple were advised by their son to invest $2 million in a cryptocurrency – ethereum. When they asked a financial advisor if this was a good idea, they were advised not to buy ethereum because of the fraudulent activity and high volatility associated with cryptocurrency.
If you had $2 million, would you feel comfortable putting it all in cryptocurrency?
What can you do to avoid your own financial horror stories? Stick to tried and true investing methods. Instead of options, derivatives, foreign currencies, and cryptocurrencies, invest in stocks, bonds, and real estate. And don’t try to pick individual stocks and bonds; invest in mutual funds or exchange traded funds. No matter how clever or lucky you are, picking individual stocks and bonds is really hard and it’s a good way to lose money. Better go with something that’s worked for millions of people.
Have you seen healthy returns on your investments? Do you have a horror story of your own?
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