The Ignorant Investor

At "Ask SmartMoney":

QUESTION: I'm 74 years old. My broker is asking me to invest 50% of my assets in an unlisted REIT and an unlisted equipment-leasing fund. The idea is to have a portfolio with no stocks, no bonds and a sizable income. Would you consider this appropriate?
Ben Suntag
Rockaway, N.J.

ANSWER: Appropriate? Hardly. More like nuts. Placing half your assets into two illiquid investments "makes no sense," says Ralph Block, author of Investing in REITs. "The most important aspect of investing is diversification."

It sounds like your broker is thinking more of his own income needs than yours — commissions on these types of investments typically run around 7%.

Good answer. This kind of advice is why people should never trust brokers. When the revolution comes, I'm hauling my ass over to this broker's house with my menshevik comrades and stringing him up from his wrought iron balcony. Let the old man go at him like he was an overstuffed pinata.

All brokers have wrought iron balconies, by the way. They build them on their mansions using the sweat of hard-working and overly trusting American investors. This is fact! Everybody knows this.