Funds' New Sales Pitch: Trust Us...Really

[Robbien]

Russel Kinnel, 06.21.04, 7:00 AM ET

Fund companies are having a tough time figuring out how to advertise their funds these days. The old standby was to advertise recent returns in the hope that some people would think short-term returns were good indicators of future returns. However, the bear market proved that tack was a dead end. If you tell an investor to buy based on short-term returns, then they'll probably sell when the inevitable downturn comes.

Now, the market-timing scandal is adding to that challenge. Investors are more focused on integrity and are rightly wary of slick marketing campaigns. So, the industry has responded with two approaches. One is an informational ad that has a rather sober message and encourages investors to do more research. No mention of returns that will get you rich quick. No managers staring down at you like Greek gods.

The other approach is to push the firm's integrity. It says "Trust us (this time)." Scandal-marked shops such as Janus and Putnam are among those that have adopted this line. Some have argued that it's a little early for companies reforming their practices to speak of integrity. And I'll go one step further and point out that there won't likely be any correlation between fund companies with integrity and ad campaigns highlighting integrity. The real relationship is between the size of ad budgets and ads highlighting integrity. Many of the most ethical firms have little or no advertising budgets because they never lost sight of the fact that they were fiduciaries, and not salespeople.

http://www.forbes.com/finance/feeds/mstar/2004/06/21/mstar1_2_16206_132.html

[sendero]

1. Put your money...

...in a mattress. The overall economy, and hence the stock market, is on very shaky ground. Add the possibility you will get fleeced by trading scams, why would you bother.

Money markets are still yielding less than 1%. Stock market is like playing a casino. Mattress sounds good. :)

[tridim]

2. As soon as Ken Lay is convicted for his crimes

I'll take another look at mutual funds and stocks. Until then, the stock market is nothing but a scam. I can't invest in something I don't trust.

[uptown ruler]

3. uh huh...

yeah, trust you guys? you are the guys funding the republican party. give me a break.


Spreading The Word
The Irony Curtain Shop

[Uben]

4. Invest

Here's a tip- Harley-Davidson. Made in America, by americans! I have about $50K in their stock. It has been a winner for the last ten years. I bought another $10k in Feb 04, and it is already up 25% since then! I've diverted all my mutual fund monies into this and a couple of more solid blue chips. You won't get rich overnight, but you aren't going to lose money. If you are too wary of the stock market, real estate is the answer. It has returned a solid 8% for the last thirty years.

[Delano]

5. That's nice if you have disposable income.

A lot of us have nothing left after rent & food.