Do Investments Have Fashion Appeal?

Unfortunately, this is the way too many investments are sold.

Investment banks are always trying to figure out what will be most appealing to their customers. In most businesses, this can and should be business as usual. But with investments, it has to be different. Why? Today’s fashionable investments may not be what is likely to provide the best risk-return trade off in the future.

It is the investment advisor’s job to help clients sift through what may seem appealing based on today’s headlines and recommend investments that are good for the client on a purely financial basis.

At least, this is how I see it. Am I too idealistic? Most of my past sales supervisors thought so!

Below is a link to an article, “The Devil Wears Nada.” It is a good take on the way investments can have fashion cycles, just like clothes. But unlike clothing, chasing investment fads can lead to serious financial consequences.

The Devil Wears Nada

 Photo by Henry Jose