Broker and Broker

In 1984, my wife and I had saved $15,000 and wanted to invest. At a big brokerage, we were mighty impressed with our broker's three-piece suit and the photo on his desk of his loving wife and children. He convinced us to invest $5,000 in a limited real estate partnership, $5,000 in a gas and oil company, and $5,000 in his company's aggressive-growth mutual fund. Well, in less than seven years, the first two investments went bankrupt. Imagine if he had just recommended blue-chip stocks. We've since invested in Hewlett-Packard and IBM.

— Joe Yarborough, Tampa, Fla.

The Fool Responds: This is a good reminder that not all brokers are brilliant or are working in your best interest. (Many earn commissions by getting you to invest in this or that, or by getting you to trade frequently.) Many blue chips can be hard to beat. Hewlett-Packard has averaged about 10 percent per year over the past 20 years, and a market-trouncing 3 percent over the past decade. IBM has grown more slowly, but has still grown, beating the market.

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