A financial planner writing in the New York Times gave the following sarcastic investment advice: On Jan. 1 of each year, just figure out which asset class will do really well and move all your money into that investment.

a. What does the financial planner mean by asset class?

b. Why isnt this advice something an investor should actually follow? What would an investor be better off doing instead?

1. The value of my house increases, and then my wealth increases.

2. My boss gives me a 10% raise, and then my income increases.

3. If I take cash out of the bank and use it to buy an Apple iPad, my money will increase, my wealth will stay the same.