Marketing–The Ultimate Smoke Screen
Jun 27 2008
The Marketing Departments of the investment world are always hard at work. They are trained and ready to develop an investment vehicle that will satisfy your insatiable greed or quell your greatest fear. Marketing departments feed on trends and public opinions. The information age is to Marketing what the gym shower floor is to athletes foot.
Beware the latest hot marketed product. Shortly after Y2K when interest rates started to drop (remember money market accounts at .5%?) it was the Floating Rate funds. It was also the start of the popularity of the CMO, Collateralized Mortgage Obligation. “You too could own other peoples’ mortgages and get their higher interest rate as your return.” There were the Asian Tigers and every fund company had their version of the tiger. Of course, the “dot net” and “dot com” funds. Remember the good old days when your internet fund returned over 100%! Man!, did that sector go bust in a hurry. Equity indexed annuities were the rage for a while–in the land of scary market stretches, “guarantees” are king. Insurance companies will always find a new product to get around a tax code.
Now what do we have? Commodities in every shape and color so they are available to the average citizens looking to play with the big dogs of Wall Street. Energy has been golden for a while. Into Sci-Fi? Look under the energy or technology sectors. Exchange Traded Funds (ETF) proved to be popular in the beginning when they were a basic form to invest in stocks; and they still make sense for a lot of folks. Once something proves to be popular, watch out! Now ETFs are being created to appeal to whatever’s the latest flavor of the day–currency exchange, specific country, specific sector–the MSN Money web site has 742 ETFs listed. Hedge fund anyone?
As our means to communicate expand to infinity, the easier it gets for Marketing people to get their hooks in you and make a buck. Hey, I’m all about free enterprise and capitalism but good grief. Is it possible to have too much choice? There is so much talk going on, I don’t know when to listen. Well actually, I don’t listen to most of the smoke. I’m not a trendy kinda guy. Most of us have more basic needs and simpler ways to achieve our goals. So the bottom line; KISS.
Ooh, check it out! There’s a currency ETF on the Swedish Krona! I don’t think so. What say you?
