Chops Money

Investing - Know Before You Buy

Tuesday, March 31st, 2009 | investing

A while ago I was talking to my boss and the subject of the stock market came up.  She said that she used to buy stocks, so I mentioned that I own some stocks.  Her eyes got really wide and panicky and she said “Stocks are too risky, I only buy mutual funds now.”

I found this incredibly amusing because most mutual funds are comprised (fully or partially) of stocks.  She went on to say how the stock market was too wild, it was full of fraud and that it was a sure way to lose your shirt.  Now I was struggling to hold back laughter, but I could be wrong.  Maybe she owned a corporate bond fund.  I asked her which mutual funds she owned and she stammered “umm, uh…whatever my financial guy bought for me”.

I find this deliciously ironic - a woman who was scared of stocks put her faith (and money) in a stranger, who ended up buying stocks for her.  The moral of the story?  Know what you’re buying when you invest.

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