Warren Buffett “Never Invest in a Business You Cannot Understand”Buffett

Good advice.

I’m going to take it one step further and say “something” or “anything”.

I think Wall Street has created a lot of very creative financial products out there, and some of them are good while others are bad.  Mostly it depends on which “tool” you need to meet your individual goals.

That being said, just because something is complicated doesn’t mean it’s better, and you should definitely understand it before investing in it.

That’s one of the jobs of your financial adviser, to help explain each investment you have, how it fits into the big picture, and the pros/cons of each one.  Before you invest, be sure your questions are answered fully so you have confidence you’re making the right move!

It’s definitely something I live by, and I never recommend something to a client without full due diligence.

Never Invest in Something You Cannot Understand