Investments Du Jour – Are They Right for You?

January 13, 2011

Over the holidays I was enjoying a wonderful dinner at my brother-in-law’s house and as is the tradition, a conversation ensued after the meal.  It started off innocently enough, a little banter about politics, careers, vacations and of course the inevitable, investments.  Now I’ve been involved in a lot of conversations surrounding investments and what my opinion is on the investment du jour.  For those of you who frequent my posts, you know that I am a big proponent of sticking to fundamentals in making investment decisions.  So, asking me my thoughts on investments will lead to such topics as: what is the worst thing the investment can do and can you live with the outcome?  How does the investment fit in your overall portfolio?  Do you understand the basics of how the investment works?  I certainly understand that the answers to those questions may not be exciting but a solid investment choice doesn’t necessarily need to be exciting to get the end result we hope for.

Now the good thing about these discussions is that you will often be asked your opinion by someone who has really researched the positive side of a particular investment.  You can glean an incredible amount of information if you were indeed interested and fundamentally the investment could work in your portfolio – you have a head start as to whether it’s right for you.  But in the end what is best for you may or may not be what the person across from the table is raving about.

So next time you find yourself being asked about your thoughts on an investment (and FYI it’s often someone who has a rather one sided distorted viewpoint) remember the fundamentals.