Where should I invest?

In talking with people from all walks of life, I am frequently asked where I would recommend they invest. With the plethora of articles and books available today, it comes as no surprise it is confusing when trying to figure out where to invest. Of course, before embarking on any investment strategy you must ensure they are adequately insured, have adequate emergency reserves, and clearly identified goals. If those things are all in order, you are probably ready. Investing is not, however, about picking THE best investment at this point in time (as that changes rapidly), but really finding the best mix of investments that may fit your needs.

Keep it simple: mutual funds are probably hands down the best investments for most people. They offer professional management, liquidity, and diversification (for a relatively small initial investment) that you are unlikely to achieve on your own by buying individual securities. They also have mutual funds for almost every asset class out there. The key is to use mutual funds to to gain access to the major and minor asset classes. Major asset classes include stocks, bonds, and real estate. The minor asset classes include large, medium, small, domestic, and international stocks and short-term, intermediate-term, long-term, high--yield, corporate and government bonds. Remember it is important to gain access to all of these asset classes and to not try to figure out which on is the best at any given time. Diversification is key.