DEAR BRUCE: My wife and I have several accounts in different banks. We are in our 80s. One of our insurance agents wants us to take this money and invest in insurance accounts that will double the guaranteed interest payments we are receiving from the banks. We are not sure which way to go. We want to protect our principal. — T.P., via e-mail

DEAR BRUCE: My wife and I have several accounts in different banks. We are in our 80s. One of our insurance agents wants us to take this money and invest in insurance accounts that will double the guaranteed interest payments we are receiving from the banks. We are not sure which way to go. We want to protect our principal. — T.P., via e-mail

DEAR T.P.: The likelihood is that the salesman is trying to persuade you to invest in some kind of annuity. Annuities return a little higher percentage rate, but oftentimes, the salesman (not financial adviser) tends to exaggerate the amount of the return. The annuity is nothing more than a contract between you and a company, and there is a possibility that the company could go broke. I've never been a big fan of annuities, as many readers know. If you were younger, it might be what you are looking for; but in your senior years, there may come a time when you'll need to get at that money — and most annuities come with heavy early withdrawal penalties.

DEAR BRUCE: I am wondering whether there is any merit in diversifying my assets among fund families. I currently have 90 percent of my investments in one of the largest fund families and have just received a moderate inheritance. It would be easy to manage all of the money in one place. What are the risks in having all of it in just one fund? — Reader, via e-mail

DEAR READER: Having a degree of diversification cannot hurt. There are many fine families of funds out there, and since you have most of your assets in one, I would choose a second one that has demonstrated a good performance.

Send your questions to: Smart Money, P.O. Box 2095, Elfers, FL 34680. E-mail to: bruce@brucewilliams.com. Questions of general interest will be answered in future columns.