September 05, 2008

The best investment advice you’ll never get

Another interesting week has gone by and the markets continue to be volatile. The good news is, despite a higher than expected unemployment rate (6.1%), the US markets ended the day a tad higher. Not too bad compared with the 2-2.5% declines we’ve seen overseas today.I hope those of you who had been invested in commodities and energy related investments took the warning signs from my previous message in June to heart (Market Insights: The next bubble?).

Hopefully your exposure to commodities is relatively small at this point. Oil closed just above $106 today, there is some talk that OPEC may put a price support at around $100. We’ll see…Along with the fall in energy prices, European currencies have depreciated over 10% since Mid-July; the US$ has been on a relative rebound recently.

That being said, I will continue making my case for a diversified portfolio and to invest in low-cost index funds rather than trying to outperform the markets by stock picking.

I highly recommend reading the article below (click on link), it’s an eye-opener on some of the illusions created by the financial institutions, but it’s also a good primer on mutual funds. If you have any questions on it, send me an email. I can also show you a comparison of the actual fees of mutual funds, low-cost index funds and ETF’s (Exchange Traded Funds).

The best investment advice you’ll never get:

Happy reading, be well and stay diversified!

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