Prudent Investment
What is the most prudent investment today?Some say the most prudent investment is still the stock market and advise indexed funds. The downside, of course, is that it's tough for your investments to beat the market by being bet on it. Moreover, how prudent will your investments have been if the market corrects?
Others say that it's more prudent to have someone watch over your investments and advise managed/hedge funds. But managed/hedge funds are only as good as their managers, who don't work for free. For your investment to beat the market, they need to beat both the market and their own fees.
Others claim it prudent to geographically diversify investments and advise funds that focus on far-flung emerging markets. But in today's interconnected financial world, emerging markets aren't insulated from the rest. To the contrary, if New York coughs, London often catches a cold and Honk Kong ends up in the hospital.
Instead of, "Don't put your eggs in one basket", some advise, "Put your eggs in the best basket and watch it like a hawk." They advise buying great individual companies that lead crucial industries. But keeping an eye on companies takes time, and even great companies and industries decline. Just pull up a stock chart on the once mighty General Motors.
What then is the most prudent investment in today's market?