Unusual inquiry

cagedbirdIt’s not every day I get a solicitation for investment advice from someone in a Federal correctional institution. Here is my reply:

Dear John,

Thank you for your letter regarding investment information. I would be happy to provide investment advice to you; although it might be difficult to do so until your release. I have enclosed, for your information my booklet “Understanding Mutual Funds”. I hope you will find it interesting and useful.  

I am starting with this topic because as a rule I only use mutual funds in my client portfolios. I have created 6 investor profiles which serve clients in a range of those who desire to have very little risk for losing their money through those who wish to have more risk because of the promise of greater returns it brings. Keep in mind that even my most risky profile is only moderately risky in the scheme of things. Mutual funds provide instant investment portfolios that are selected by competent money managers supported by staffs of analysts who spend all their days researching companies. I take advantage of this very low cost way to access extremely valuable opinions by simply investing in their mutual funds.  

Mutual funds are an important tool for me but they are not my investment philosophy. The philosophy I have adopted for my practice is called “Modern Portfolio Theory”. It is the only empirical study of investing that I know of. Its researchers won the Nobel Prize for economics. I won’t go into it in detail here but I can recommend a couple of useful books for you. One is “The Four Pillars of Investing” by John Bogle. You might recognize his name since he is the founder of Vanguard Funds. The other book is called “The Wealthy Barber”. This is a book spawned by the PBS series by the same name. The Wealthy Barber is a great guide to anyone who wants to grow rich over their lifetime. It is not a guide to getting rich quickly, however. 

I hope my response to your letter will offer you some cheer in what must be a very dismal and dreary existence. Keep in mind, where there is life there is hope. 

Yours Truly,