The Wall Street Journal ran a very interesting article last week asking Wall Street professionals how they invest their money in turbulent economic times such as these. 

Cash, Treasuries and investment grade bonds seemed to be the universal answer.

A couple of nights before that article ran we had a brief encounter with a young-ish tourist who is here on vacation with his wife, mother and three children.  

When asked by Ken how he could afford two weeks in Italy with a large family, he responded that he is an investment banker and that "business has been good." 

But… he was also quick to point out that, even though he works for a large mutual fund company, his children’s college funds are completely invested in US Treasury Zero Coupon Bonds!

HUH?

Even more bizarre than his admission was the thrust of the Journal’s article. 

When the reporter asked the experts, who are so safely invested, if the average person should follow their lead when investing their 401k funds, not one 'expert' said "Yes."

The rationale is that the Wall Street cognoscenti already have a lot of money in the bank so they don't need to take the risk for possible future growth; thus implying that middle class working Americans don't have enough money and should therefore risk what little they have to get ahead!

Don't you feel like Alice in "Through the Looking Glass" where up is down and down is up?

I still remember our early years of marriage when Ken was working on Wall Street and money was tight.  When I asked him why we weren't investing in stocks he replied that we couldn’' afford to lose any money.  He believed then, and still does today, that only disposable cash (cash that could comfortably be lost) should ever be invested. 

So our investment advice to you is this: the next time a financial professional tells you to "stay the course" or pitches another investment to you ask what he or she is currently doing with their money.

If they're honest, you may be very surprised at the answer.

Read More In: Invest Wisely