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Chapter 1. How to Use This Book > Why This Book Has Been Written

Why This Book Has Been Written

I've written this book because of what happened to a friend of mine. She was in her 50s, and had painfully accumulated over her working life a nest egg. When she lost her job, she received the money in a lump sum. It was to help support her old age. She visited the Web site of one of the largest mutual fund companies and studied the performance record of the 15 or so funds they offered for annuity contracts. She identified those with the best returns. She then called a representative at the company to ask about an investment. He told her that she had picked the two best funds, just what she should do, and he arranged for her to make the investment. She now had an annuity contract with the mutual fund company with her capital invested in a single fund.

Three months later the fund began a rapid collapse. She called the company and was told that the decline was temporary, and that the proper long-term strategy was to remain invested. She did, and the fund fell to about 30 percent of its level at which she had bought it. It turned out that the fund had been heavily invested in Internet stocks.


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