AIG: Not as Simple as It Seems

Investors should understand what they buy. That's why Warren Buffett generally shuns technology companies, and why, back in the day, Fidelity's Peter Lynch bought stock of company that made the pantyhose his wife liked. "Buy what you know" is a good rule of thumb -- and one that's difficult to follow for investors who want to buy shares of American International Group (symbol AIG).

AIG sounds simple. It is the largest underwriter of commercial and industrial insurance in the world. The New York-based company has various divisions that offer a wide range of financial products from aircraft leasing to life insurance to real estate investment management. It operates in 130 countries and jurisdictions, and runs the only insurer in China that's entirely owned by a U.S. company. In sum, when it comes to insurance, AIG's reach is unmatched.