More investing advice

A week or so ago I warned that gold and other commodities were nearing the end of their run up. Today, I'll offer some more unsolicited investment advice. DON'T TAKE IT TOO SERIOUSLY. Why am I warning people not to take their investments too seriously? This news item out of India:

INDIAN police are watching out for possible suicides by brokers and investors after a steep market slide wiped out billions of pounds in share values, officials said yesterday.

Policemen were patrolling near lakes and canals, possible places where people in distress could head to kill themselves. They said rescue teams were on the alert.

"A financial crisis can trigger suicides. We are just trying to prevent them," said a police official in Ahmedabad, a main trading hub.

India's Bombay Stock Exchange, which had a market value of £349 billion last week after falling 10 per cent in the previous two sessions, slid as much as another 10 per cent in early trading yesterday, following sales of stocks held by brokers as security on behalf of their clients.

"Gold has turned into brass. We are finished," said SS Gupta, a middle-aged Mumbai broker who said he had lost millions of rupees in two hours of trading.

Three words of advice: Diversify your assets. Beyond that, you need to understand your own capacity for risk. If you can't handle the possibility of losing ALL of your investment, don't invest in individual stocks as any company can go completely bankrupt. Go with mutual funds instead. If you can't even handle the ups and downs of a mutual fund then go with T-bills, CD's, and money market accounts. Even there you run the risk of not beating inflation. If you're just starting, go to a professional financial advisor and work out a plan that meets your situation. Lastly, don't play the game of gambling with margin accounts.