David John MarottaDavid John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com
Host: Is my money FDIC insured?
David Morotta: No, investments are not FDIC insured and you need to know that investments are inherently volatile. So, unlike your bank account, that will normally go up in value, we say the stock markets go up 10 to 12% every year, they never go up 10 to 12%, they do 18, -10, they do 30, then they may do -25 and they are all over the place.
It turns out that risk goes with return and so sometimes if you want to higher level of return, you have to able to assume a higher level of risk. So, your investments can go both up and down, even bond investments and bond mutual funds can go up and down and so these are inherently risky investments and nothing should be put in them that doesn t have at least a five year time horizon.