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URL:  http://boards.fool.com/quotif-hard-number-arguments-cant-be-17394077.aspx

Subject:  Re: OT: Any TC2000(funds) Users? Date:  6/20/2002  10:22 PM
Author:  Lokicious Number:  4016 of 35367

"If hard-number arguments can't be constructed as to why CD's are the better choice in this current market than investments that are perceived to be riskier but aren't proven to be riskier when properly adjusted for reward, buying CD's is acting on superstitions that have the rational force of the tooth fairy."

Charlie,

This is nonsense. Greater risk leads to greater potential for reward. It also leads to greater potential to lose everything.

A diversification strategy is about having enough high risk to help against inflation and enough low risk to make sure you don't get stuck with nothing. You talk as if all you have to do is get expert reading charts and what look like risks become a sure thing, or if you take enough high risks, enough will pay off you can cover the losers. Sometimes none of them pay off. I've got a whole bunch of high risk/high return stock investments, with a relatively small commitment of cash. If one of them pays off big, I can lose on all the others and still beat an index fund. But I have most of my stock money in an index fund because there's a pretty good chance none of my high risk picks will make it. Plus, your strategy demands a lot more attention than I'm willing to pay. I'm sure when I get old, I can earn more money as a freelance editor or something like that than I could trying to milk a few more perceniles of earnings out of my investments.
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