Greater Burgess News

The One Safe Investment and Why You Never Hear About It

By: Zvi Bodie



Economist Zvi Bodie, perhaps the country's foremost expert on pension finance, insists that every American at least consider an investment that financial advisors almost never mention.

Zvi Bodie: Recently, Paul Sullivan wrote in his Wealth Matters column about financial advisors' increasing interest in technology. He raises two questions about expanded use of technology: Will it help advisers do their job better? And will it be better for clients or confuse and frustrate them? A friend asked me how I would answer those questions. I thought Making Sense readers might be interested too.

Remember the old saw about computer forecasting models? GIGO -- Garbage In, Garbage Out. Technology can make good advice more accessible and less costly, but it cannot turn bad advice into good advice. If the technology is designed to pitch some investment service that is not in the best interest of clients, employing sophisticated technology and interactive software will only serve to deceive the client more efficiently. Fancy software is not a substitute for trustworthiness and good science.

Let me give an example to make clear what I mean.

Continued at:

http://www.pbs.org/newshour/rundown/2013/05/the-one-safe-investment-and-why-you-never-hear-about-it-from-financial-advisors.html