Investor Profile

Investing is a bit like exercise.....it's not so important what you choose to do - the important thing is that you choose to do it and be consistent about doing it.

There is a broad spectrum of investing styles so take a look and see which feels most comfortable for your personality.

The Couch Potato

We think this technique would have even broader appeal if it had a little more appealing name like "Auto-Pilot Investing for People with Rich Lives and Crowded Social Schedules". If this describes you, if you hate reading small print and crunching numbers, if you'd rather be playing tennis or listening to Pavrotti or Ricky Martin than tracking the Dow, then give this some consideration.

The "Couch Potato", a technique espoused by syndicated financial writer Scott Burns, among others, keeps investing simple and has produced very good results, Statistically the "Couch Potato" technique has performed better for most periods than either a balanced or equity fund: Put 50% in Vanguard Index 500 and the other half in Vanguard Intermediate Government Fund ( or any of the top broad index funds for fixed income investments), then rebalance them to 50-50 every year.

You can't get much simpler than that, and, if you do it long enough, eventually your nest egg will be a lot bigger.

Lifecycle Funds

Lifecycle funds are a step up in complexity from "the Couch Potato", but really, just a "baby step". If you know how old you are and can project what date you might retire, you shouldn't have any trouble at all.

"Investment pros often tout the benefits of a well-diversified portfolio - one that includes a mix of stocks, bonds, and cash instruments. But researching and building the proper investment mix can be a time-consuming chore.

Enter mutual-fund one-stop shopping.

With just one call (or website visit), you can order a single mutual fund that takes care of almost all your major investment needs.Buying into a lifecycle fund or an asset-allocation fund givesinvestors an investment that packs a multi-edged wallop. Both types of funds includestocks, bonds, and, often, money-market instruments. Moreover, they can be adjusted for your age. The type of fund you buy at age 35 may be quite different from a similar lifecycle fund suitable for someone age 55.

"What's unique about these types of mutual funds is that with one purchase you can pretty much find a fund to meet many of your financial goals, says Jon Hale, who tracks several lifecycle funds for information-firm Morningstar Inc., Chicago....

Studies by mutual-fund firmJ.&W. Seligman, New York ,show that investors come out ahead usingasset-allocation/lifecycle models....

According to Morningstar, there are now some 48 lifecycle funds, 26 "target" retirement funds (lifecycle funds with a target date attached to the fund, such as the Fidelity Freedom 2000 fund), and 295 asset-allocation funds...."

( Mutual Funds Interactive for more and names of funds)

Of course, with this many choices, you're going to have to really sit down and think throughwhich of these funds is the best match for your personality, your goals and the degree of risk you're comfortable with. But having a lot of excellent choices from an array of very reputable firms is a good problem to have. Basically, these firms have done a lot of thinking for you already and will continue to do so for the life of the fund, as long as you hold it.

The Adventurous Investor

Since not all seasoned, professionals running well known mutual funds always make money, it's a pretty easy bet to say none of us will make money all the time either. The question is, if you are the sole person responsible for your investments, will it make you nervous? Will a big loss put you into serious financial straits? If you answer yes, or even maybe to either one of these questions, you should probably think twice about investing money on your own.

On the other hand, some of us have, like the Great Gatsby, a heightened sense of the possibilities life offers. We like adventure, love to ride roller coasters, would consider a trip into an Amazon jungle or scaling a Himalayan mountain and would enjoy being an astronaut. If this pretty accurately describes you, and you also want to learn first hand how the market acts by watching your own investments, then go for it. With all that bravado going for you , you will probably be able to figure out a way to recover, even if you do encounter a big down draft in the market. You can also hedge your bets by just going on your own with a portion of your money, leaving the rest someplace very safe, like Treasury Bills, so all will not be lost if your learning process is a little bumpier than you expect.

Professionals tell us the best bet here is still to put your faith in Asset Allocation.

You can go to AW Financial Center to research the most successful funds and how they allocate their money. Then you can do the same. Just remember to watch your investment closely. Some people have had whole investments wiped out during the time they went to lunch. And if it all seems a bit scary and nerve racking for you, just remember the little old ladies who kept their IBM stock under their mattress are among the richest investors, so don't hesitate to go back to the Couch Potato technique.