Market Myths vs. Reality
Every year I hear the following comments and wanted to clarify some myths vs. realities.
1. "I do not want to invest. I prefer mutual funds because they are safe." Equity mutual funds are made up of a collection of stocks. There are a greater number of holdings, but that does not make them safer. Often, they are not diversified, so they may be more of a risk. You also might be invested in companies you like/dislike, such as big oil, tobacco, or firearms.
2. "I am a conservative investor and hold high yield bonds to get greater income." While it is true, high yield bonds return greater cash flow, the other name for high yield is 'junk bonds'. Need I say more?
3. "I am invested in an IRA, not stocks and bonds." The term IRA refers to an IRS tax code not an investment vehicle. Funds in an IRA are generally invested in the stock and or bond market through mutual funds, exchange traded funds, stocks, bonds, or annuities.
4. "I want to put my money in an annuity because they have a guaranteed return, so it is safe." While many annuities are guaranteed, all annuities are only as good as the company that offers the annuity. This is definitely a 'buyer beware.'
If you have questions that you want to ask as to myth vs. reality, come see me. I look forward to meeting with you.
Financial Investment Team
15350 SW Sequoia Pkwy., Ste. 150
Portland, Oregon 97224