I have a problem. Well, it is not an immediate one but the time has come when thinking about stopping work and what I am going to be surviving on is only natural. Would I still be working when I am sixty four? Not if I could help it! But if I don’t get very serious about supplementing my pension provisions it is likely that when I retire I won’t be able to afford even hot dogs for dinner.

Over the last couple of years I have entertained myself thinking about extreme options. According to one of these, I could by-pass the whole ‘how am I going to survive in retirement’ issue by going to prison when I am about seventy. Saving on nursing home fees is a bonus!

A little less extreme option is to face the problem ‘like a woman’ and find acceptably reliable ways to ‘store my labour’. My great grandparents used to store labour by buying gold coins of different value and my great grandmother wore their wealth around her neck – like in the picture. Very handy if you live a turbulent life but, let’s face it, this is a thing of the past.

Today we can store labour by saving and investing. With savings being eroded by inflation and the volatility of shares from last year, storing labour this way is like carrying water in a bucket with many holes: before you know it there is hardly anything left in. Not for me!

Or this is what I thought before I started reading about ‘basket’ or collective investment instruments such as mutual funds and investment trusts. The way I see it, there are two main problems with investing in the stock market at the moment: one is the assumption that the world will be the same after the financial upheaval is over and the other one is about finding ways to offset the risks that follow from the current volatility of the markets.

There is not much I can do about the first problem: whilst the world of finance is highly likely to change we can safely assume some level of continuity. Addressing the problem of risk can be approached in two different ways: by investing for the long term and keeping stock for ten years or over, and by diversifying investment portfolios so that the average works out. Mutual funds and investment trusts offer such diversity.

Another advantage of this kind of investment in my eyes is not only that they allow us to spread the risk but they are also generally run by professional fund managers. I am not a sophisticated investor so I would prefer to know that somebody who knows what they are doing is looking after my investments. Or am I entirely off the mark here?

May be I should just get on with reading ‘The Intelligent Investor’, pray and hope for the best. What do you reckon?