Archive for August, 2016

A tale of two investments

Though we all know the proverb never judge a book by it’s cover, we seldom follow it, the attractiveness of the packaging is a selling point.

Over the last 15 odd years spent in advising people on how to manage their money, i have learned the sad fact that packaging sells more than the product.

The best performing investment over the last 20 years has been equity and along with it equity mutual funds but many are still reluctant to buy equities but dont seem to mind buying Insurance policies that can at best give 5-6% returns after 10,15 years but are sold well as the packaging is good ( never talk about lock in, costs and actual returns but make great advertising about childrens education and retirement etc!)

I have lost count of the number of investors who have been taken for a ride by their banker, agent or relative who pushed a insurance policy that gives low return but packaged well as money back or some other name ( your own money coming back after 5 years that too partially is somehow a great idea !!), etc., While most investors are afraid of the volatility in equity they seem fine taking the same risk with a ULIP which will give a lower return !

Packaging is fine but what is inside is whats going to give you the returns, Buying a soap or shampoo as the ad or packing was good is fine, as one can stop buying it from next time. when it comes to investing where the results are after many years away, it is better to focus on what is inside than how it is packed !

Have a great weekend !

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