There are about a million different investments out there to choose from, so the sheer number of them is certainly enough to make your eyes glaze over. And understanding these things requires learning an entirely new vocabulary, because when you’re examining investments, it won’t be long before you encounter vernacular specific to the investment world. You know, words like accretion, moving average, amortization, average weighted maturity and other words too numerous, and way too boring, to mention. But before your eyes glaze over at the thought of sifting through all this hoo-ha, realize that 99% of investments aren’t really unique alternatives. They’re merely the result of repackaging an existing investment, or otherwise adding a new twist to an old story. Why would anyone want to repackage or otherwise disguise an investment? One reason I already gave you...so you’ll hire help. But another reason is more fundamental...it’s done in hopes that a new, improved version of an old idea will spark new, improved sales of an old investment.

Go to the laundry aisle in the grocery store. You’ll see dozens of boxes of different detergents, most of which will be labeled with either the word “New!,” “Improved!,” or the ever-popular, “New and Improved!!” But no matter what you call it, how you package it or how many exclamation points you print on the box, when it’s all said and done these boxes and bottles are filled with nothing more than soap, same as they’ve always been.

Investments are no different. At first blush it may appear that all these mutual funds, unit trusts, REITs, options, futures, partnerships and what have you are unique, thus requiring encyclopedic knowledge to understand the technicalities. But more often than not what you’re looking at is just an old investment in a new box. Once you know the fundamentals, you need only identify the bell, whistle or exclamation point that differentiates one from another.