Chapter 13
Selecting Your Investments
IN THIS CHAPTER
Checking out your choices
Finding the right combination of investments
Keeping an eye on your pie
Knowing where to go for help
When you drive somewhere, what kind of ride do you like? A bumpy one that rises and dips like a rollercoaster, leaving you with a stomachache by the time you reach your destination? Or a smooth one that lets you arrive feeling rested and relaxed? Unless you truly enjoy discomfort, you probably prefer the smooth ride.
Investing for retirement is a lot like car rides. And I have news for you — diversifying your investments (choosing a range of different ones) puts you on a smoother investing path than not diversifying. How so? Different types of investments, such as stocks and bonds, tend to move up and down in value at different times. If you choose several investments, one may go down in value as another begins to go up, giving you a relatively even ride.
“Why not just put everything in the one investment that performs better than the others?” you ask. Great idea, in theory. But in practice, you can’t ...
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