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
Speaker:Should I invest in limited partnerships for oil exploration?
David Moratta:Limited partnerships can be a very good investment but unless you know what you are doing, you are probably going to get into trouble. There are a few things that are dangerous about limited partnerships and we use a criteria for what we invest in. First, it has to be liquid. So, there has to be a market where you can always buy and sell and you always know what the prices you can buy at and the prices you can sell at. Limited partnerships, there is always a price you can buy at but there is not always a price you can sell at. They are hard to get in and out of.
The second thing is they need to be publicly valued, meaning you need to know what they are worth. So, if you want to buy into a limited partnership, someone has to decide what thats worth, its not an open market.