Many, if not most, investments will not turn out to be big winners. That’s just common sense wed to simple arithmetic; if investing was simple, everyone on your block would own a palatial mansion with two Maseratis and a luxury speedboat parked conspicuously in its driveway. But they don’t, of course. You have to accept this stark reality straight up front if you decide to run the risk of investing some or all of your money in entities or instruments which run some degree of risk. Yet never forget the flip side of the coin, which is this: All it takes is one or two or three big “hits” to offset all the losses you may be forced to absorb on other investments in your financial portfolio. Said is purely the price you have to pay for being in the game—the “cover charge” to gain entrance into the financial world, in other words. Because if you don’t want to run any risk whatsoever—if you wanna play everything perfectly safe and be guaranteed that you will never lose one penny of value—go and “invest” all of your earnings in a commercial bank savings account, but then don’t let me hear you complaining one peep as you go about collecting a whopping one percent interest bonus on your “investment” at the end of the calendar year. Better yet, why don’t you follow Gramps’ savvy investment lead and stash all of your earnings in a coffee can as a prelude to venturing outside to bury it in your backyard for long-term safekeeping. Your money will doubtless be secure and risk-free hidden there beneath the soil as it shares space with nightcrawlers and grubworms and their ilk, but a solid hunch of mine keeps insisting that the cash you hid away probably won’t grow too much in value over time. Truthfully—even assuming a low rate of inflation, which is never an ironclad certainty—any money you have hidden away in your coffee can will depreciate in value with astonishing rapidity not unlike the once-new car sitting in your driveway or the year-old appliances anchoring your kitchen.
Fred's Soapbox 