The safest place for short-term money is in Treasury money market funds like the one that Vanguard offers.  The safest place for long-term money (money you know you won’t spend in the next 5 years) is in a diversified portfolio of domestic and international equities along with high quality bonds.  The big risk to investing long-term money in treasury bonds is inflation; this means that your money may have less purchasing power over time.

2. If you had a sum of money to invest right now and had to choose between real estate and a diversified investment portfolio, which direction would you go?

Always do the diversified portfolio as long as it includes 14 asset classes and not just the usual 5 asset classes.  This is the money madness mistake that we all have made, including the Wall Street know-it-alls.  Never put all your eggs in one (or even several) baskets.  Nobody can predict the future, so the diversified strategy is the best, albeit, the most boring strategy.  Boring is looking really good right now!

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