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• Friday, August 17, 2007 12:43 PM

  Investing IS betting??? Sorry Felix,

  But you're just flat wrong on this one. There is a distinction between betting and investing, and that distinction is time.

  Buying a stock you know nothing about based on a tip from a friend? Betting. Day trading? Betting. Junk bonds? Betting. Hedge funds? Betting? Putting your money in the market? Investing.

  Historically, the stock market (which has been in place for well over a century now) has paid investors an average of about 10% a year. That is, if you put your money there and LEAVE it there. Long term, the fluxuations of the market don't matter because over time it's all corrected. Any financial planner worth a damn will advise that if you don't need your money for at least five years (ten is better) to put it in the market where your money will work for you. This is AFTER you have a chunk of money set aside for emergencies sitting in something boring and safe, like a money market account.

  Index funds are your best bet, no pun intended. Low expense ratios, minimal movement of your money, and safe:

  http://www.fool.com/mutualfunds/indexfunds/indexfunds01.htm?source=LN

  —aynatt Read aynatt's other letters
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