Investing fundamentals #10 – Don’t believe the hype

In the final blog in a series about the ten fundamentals of investing, I look at how the best investors avoid the marketing hype associated with investment funds.

The best investors don’t get caught up in the marketing hype surrounding investment funds.

A big advertising campaign from a fund manager is never a good reason to invest. Just because a provider has blown their annual marketing budget on glossy magazine adverts or big posters at your train station does not mean they offer a good investment.

Another area of investing hype to avoid is new fund launches. These tend to come along with lots of money spent on advertising and promotion.

We often advise our clients to sit out any new fund launches for at least three years.  This gives the fund manager the chance to establish a track record and demonstrate their strategy works. It also allows the investor to see if the fund has gathered sufficient funds under management to be viable long-term.

Investing hype can also surround a particular asset class, with commentators getting excited about the prospects for an investment in the short-term. This usually signals the right time to ignore the views and instead stick to your established investment plans.

Read about all ten investing fundamentals by downloading our free guide:

The Investing Fundamentals Guide 2014