According to SmartMoney, Schwab is "Best" in mutual funds and investment products.

This is a nice piece of publicity for Schwab. SmartMoney's rankings are highly regarded and garner much attention from individual investors. But what does it really mean to be "Best" and why did Schwab win the coveted rankings?

According to the article on SmartMoney's website, Schwab edged out the competition for a couple of reasons that mainly pertain to the number of mutual funds available and percentage of mutual funds that are no load (and a couple of other factors not related to mutual funds).

So, how should mutual fund investors use this information provided by SmartMoney? Investors certainly shouldn't read that they should buy their mutual funds from Schwab for the above stated reasons (number of funds and percentage that are no load). In fact, too many fund offerings may be a distraction for investors.

My recommendation is to use this information as one factor out of several. Other factors to consider and questions to ask when looking for a place to buy your funds: What is the transaction charge to buy a mutual fund? What is the minimum investment in the funds that are available? What mutual fund research is made available on their website?

That's enough of my point of view. Send me an email or make a comment below and tell us what you look for when choosing a discount broker to buy your funds. Maybe you don't buy through a discount broker - we still want to hear from you.

TIPS (Treasury Inflation Protected Securities) are among the worst performing fixed income investments over the past six months. Other than two international bond benchmarks and two short-term US Treasury Bond benchmarks, the BarCap US TIPS Index has underperformed all other fixed income indexes.

But wait, you say, many gurus expect a massive dose of inflation in the coming years due to ballooning debt and deficits. Shouldn't TIPS be outperforming other bonds? Not necessarily.

Read my interview with John Hollyer, co-manager of the Vanguard TIPS Fund for detailed information about TIPS and the benefits and risks of investing in TIPS.

Also, don't be concerned if you own TIPS. It's a reasonable diversifier and hedge against inflation. The recent performance should also be ignored. Considering that TIPS are one of the top performing fixed income investments over the past three years, it will payoff if investors ignore past performance and rely on investment diversification strategies.

There's no reason to run from TIPS today. But make yourself aware of the upside and downside of this esoteric bond investment.

Learn More About TIPS

A Primer on Treasury Inflation-Protected Securities

Pros and Cons of TIPS Mutual Funds

I didn't doubt the CEO of my firm, Jim Joslin, when I heard him once say that he worked with, and regularly played squash with, John Bogle, founder of Vanguard. But I did doubt that I would ever have the honor of hearing the living legend himself speak to our small firm of 15 employees in Boston. Of course, until Jim said that it was a possibility...

Speak to our firm was just what Mr. Bogle did. Last week, he joined us in celebrating Jim's birthday, shared his thoughts on investing, signed a copy of his latest book for everyone, and gave us more than a bit of advice. While there was plenty to take away from the evening, I will share a question that was asked by Jim's wife, Sally Joslin.

The question was not common, but the answer surprisingly was one that we have all heard before, but many refuse to accept and practice. Sally's question was: "If you could warn investors about one thing, what would it be?"

Mr. Bogle, as he admitted, could have shared any number of his opinions about the current state of the financial world (e.g., financial reform, derivatives, unscrupulous advisors, Greece), but instead focused on investor behavior. He strongly advised that investors heed the warning that past performance is not indicative of future performance.

He went on to say that too many investors (and investment professionals) focus on past performance. If a particular asset class/style outperformed another, it is not reason to buy the investment; there is no reason to believe the outperformance will continue. Of all the things he could have warned us about, he chose to warn us about our behavior and tendencies. After all, as Mr. Bogle obviously recognizes, we cannot control the Greek debt issues, financial reform, etc. We can control, or should be able to control, our investment behavior.

So we should consider ourselves warned, by one of the most influential invesment industry thoughtleaders of our time, to not chase the hot dot.

Read More:

Top Performing Funds and the Cover Story Curse

For the past month, I have been highlighting "back to the basics" articles in my free weekly newsletter. Why?

For starters, we have experienced (or are experiencing) one of the most difficult market environments in history. Some investors are frozen, many investors have lost confidence in the financial system and others simply do not know how to get their financial houses in order.

Getting back to the basics won't help everyone, but for those looking for a place to begin, Before You Invest in Mutual Funds offers a simple approach to explaining funds and other investments (with helpful links to each).

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