investing

5 investing myths debunked

Aggressive funds are money losers
Next
6 of 7
Back
Aggressive funds are money losers

Avoiding aggressive investments may seem like the best way to minimize losses in a market downturn and keep your money safe, but it has hidden downsides.

"There are lots of risks out there in the marketplace, for instance inflation risk, tax risk to your purchasing power," says Masiello.

Even though you may keep your principal whole, if you earn less than the inflation rate, the purchasing power of your money will be eroded.

"After tax if you earn 1.5 percent and you are in the 30 percent tax bracket, you really earned 1 percent. And if inflation is 3 percent, you're really at minus 2 percent. True, you didn't lose money. But you didn't earn money and your purchasing power just got cut."

Many aggressive investments will preserve the purchasing power of your money and add to your principal over time. Combined with a smart investing strategy and diverse investments, the risk will be minimized and, it is hoped, returns boosted.


 

 

advertisement

          Connect with us
Product Rate Change Last week
1 Year CD 0.90%  0.01 0.89%
2 Year CD 1.03%  0.02 1.01%
5 Year CD 1.59% --0.00 1.59%
 
View Rates in your area Search
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

CDs and Investment

How can I pay myself first?

Dear Dr. Don, You often advise readers to "pay yourself first." It sounds like a fine idea. But I'm wondering how that actually should work. I'd like to know how much or what percentage of my income should be set aside... Read more

advertisement

Blog

Dr Don Taylor

ETFs in 401(k)s worth fighting for?

Should your employer's 401(k) plan let you invest in exchange-traded funds, or ETFs?  ... Read more

Partner Center
advertisement

Connect with us