Motley Fool: Why These Investments Are Not For Me

Years ago, deciding where to put your long-term money was a toss-up between a savings account and a few blue-chip shares. Nowadays, you can pretty much park your hard-earned anywhere. Buy-to-let, commodities, covered warrants, CFDs, guaranteed equity bonds, venture capital, emerging markets, hedge funds, funds of funds and a whole load of items such as antiques, stamps and wine — take your pick!

So we now have greater choice. But are we better off? Call me old fashioned, but I reckon such ‘alternative’ investments are either too speculative, too unpredictable, too complicated, too illiquid, too hands on or too costly for comfort.You see, I’m not interested in gold or stamps or wine because they don’t generate an income and so their ‘value’ is much harder to determine. Nor am I interested in emerging markets (has one ever emerged?) or venture capital trusts, because their assets are fraught with greater uncertainties. I’m not interested in property because it’s difficult to sell in a hurry and I don’t fancy aggro with problem tenants. And I’m not interested in CFDs because you can lose more than you put in, while I’m not interested in anything that attracts a large fee or little regulation!All in all, I reckon there’s a lot to be said for keeping things simple with your money. In my experience, the further you stray off the beaten track into more specialised areas, the more likely you are to suffer problems. Savings accounts and low-cost index trackers may seem boring, but history shows few people ever having suffered a long-term permanent loss of capital from them. And that’s a key point. With the security of a savings account and the proven long-term achievements of the UK stock market, I don’t see any reason to diversify my life savings into the growing band of alternatives. What now?

Want to stay on the beaten track with your money? Check out these leading savings accounts and index trackers courtesy of the Fool.Maynard contributes regularly to an index tracker and owns iShares FTSE 100, an exchange-traded fund that tracks the FTSE 100….

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