Poll: Few investors know to limit risk
"Diversify." The first rule of investing sounds grade-school simple. Yet 1 in 5 American adults surveyed recently said either an Internet-stock mutual fund or an emerging-market fund would be a better choice for an inexperienced, first-time investor than a balanced fund.
The poll, conducted by Opinion Research Corp. and the Portsmouth, N.H.-based Pax World Fund Family, also found half of the 2,016 adults polled didn't know a balanced fund invests in stocks and bonds.
And 27 percent had raided money from mutual funds to chase volatile Internet stocks - or planned to. (Only 770 of those polled called themselves "investors.")
Pax World - which wouldn't mind some new business - now offers an "education center" at its Web site (www.paxfund.com). The site includes an interactive quiz investors can use to "gauge their sensitivity to risk," and a free brochure about balanced funds.
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