The Ten Percent Solution

 

and bad, commission charges, and pretty much everything else you could possibly want to know. Also, the Morningstar Rating Service is fantastic. Again, no guar-antees, but excellent information."

"Can't you give us any other tips, Roy?" Cathy pleaded. "We need all the help we can get!"

"For you, anything. OK. Point one: Make sure that if a fund has solid rates of return, the manager who created them is still there. You're not buying past performance numbers; you're buying a manager's expertise. If fund ABC averaged fifteen percent a year under the guidance of Jack Smith, but Jack Smith has left, stay away from ABC. You can't be sure what you're getting.

"Two: Buy a global fund that invests across many dif-ferent industries. You don't want to buy a fund that invests in only one country or in only one industry—that's poor diversification. Give the manager as much flexibility as possible to invest wherever he or she sees fit. Oh, by the way, don't confuse the terms 'international fund' and 'global fund.' An international fund invests solely in foreign securities. Omitting the U.S. from investment considerations would be a big mistake! Global funds invest in both foreign and U.S. securities. In fact, I still invest most of my money right here . . . and always will.

"Three: Avoid the currently very popular market-timing schemes and sector-fund-switching concepts," Roy cautioned.

"Cool it, Roy," interjected Tom, using his usual direct style to express his confusion.

"Not familiar with those terms, Tom?" Roy chuckled. "Good thing, because, frankly, neither of them works anyway. Market timing is just what it sounds like. By using