Plain Money ideas Plainmoney investing

“It’s not a synthetic CDO”

Much has been made of transactions involving Goldman Sachs and big-dollar investors who lost big-time.

That has very little to do with the individual investor. Those were all big players taking big risks — and, unfortunately, it seems many of them didn’t know what they were doing.

This site’s recommended strategy, “buy and hold index funds,” has the great advantage of being understandable. You’re holding a little bit of every major stock in the economy. You’re not betting on one sector to grow or collapse. If the economy does well, you do well. Add this to the list of reasons for index funds: They’re not a synthetic CDO, whatever that is.