The investment world frequently capitalizes on emotions by creating products (funds) that cater to the latest fads or emotionally charged topic. A recent trend has been to create funds that filter companies based on political views.<\/p>\n\n\n\n
A recently concocted fund demonstrates this trend precisely. The adviser ostensibly boycotts certain companies in the S&P 500 perceived to be too liberal and calls it a new fund. The fund\u2019s very name is designed to excite and exploit political passions, irrespective of what the client might need in their portfolio. In addition, defining one company as \u201cleft-leaning\u201d or another as being \u201cmore Conservative\u201d is not only arbitrary in practice, but also contrary to the entire idea of diversification, and the \u201crational investor.\u201d The marketing pitch captures people who believe that filtering using personal conservative ideals, beliefs, and values will yield needed market returns while investing in companies they think fit with their political beliefs. This is not likely to have the expected outcome since markets seldom behave how we want or expect them.<\/em> They are encouraged to invest dollars without regard to capital market behavior or diversification. Amazingly they do claim to be \u2018diversified\u2019 and not to compromise performance without much history.<\/p>\n\n\n\n Whether \u201cpro Right\u201d or \u201cpro Left\u201d, I consider this trend more insidious than other marketing techniques because it encourages investors to use politics and emotions to select investments for a retirement portfolio. Retirement portfolio allocation shouldn\u2019t be derailed by fads or emotions but capture gains when others react emotionally.<\/p>\n\n\n\n Edi Alvarez, CFP\u00ae www.aikapa.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The investment world frequently capitalizes on emotions by creating products (funds) that cater to the latest fads or emotionally charged topic. A recent trend has been to create funds that filter companies based on political views. A recently concocted fund … Continue reading
BS, BEd, MS<\/p>\n\n\n\n