The investment game has changed over the past two decades. Historically, the challenge facing investors has been to identify good investments. While that’s obviously still important, investors increasingly recognize that that alone isn’t enough. Five good mutual funds can still make a bad portfolio, or at least one that’s inappropriate for a given investor’s goals. It’s becoming clear that investors must move beyond good versus bad investments and toward appropriate or inappropriate usage of investments, taking into account their time horizons and risk tolerance. It’s a level of analysis that doesn’t transfer well to the sound-bite world of televised financial advice, but it’s where investors need to go if.
