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“Flavour of the times” investing?

Flavour of the times

What is “flavour of the times” investing? Well, as an analogy – its kind of like the latest new dish on the menu that may be recommended to you, when you walk into a restaurant.

Current rave – multi-asset funds?

If you walk into a financial institution today – especially if you are a priority customer – you may likely be asked to buy a Multi-asset fund.

It typically offers you a choice of currencies, like an annual projected yield of 7.5 per cent (Australian dollars) or 5.5 per cent (Singapore dollars) paid monthly.

The fund also has the objective of capital appreciation.

The investment strategy is that the fund managers will invest in multi assets – equities, bonds, commodities, cash, etc.

The “perfect” investment?

Sounds like the “perfect” investment product right?

High monthly income of 7.5 per cent a year plus the upside of capital appreciation, and moderate risk from diversification by investing in all the major asset classes.

The premise is that one can juggle different asset classes to optimise yield, capital appreciation and risk.

However, the fact that the monthly payout is high, may mean that the investment strategy has to take this into account.

Will it work? Only the future will tell us?

Sounds like the best investment – with moderate risk (currency risk if in a foreign currency like Australian dollars), high income and capital appreciation as well!

Like the “flavour of the month” in a restaurant – it may often not last – its the basic signature dishes that always do.

Also, if you do not need monthly income – is this product suitable for you?

In my next month’s article – I shall be writing about the “flavours of the times” investment product in the mid to near-end 2000, which resulted in huge losses for most investors.

 
Leong Sze Hian
Leong Sze Hian

Leong Sze Hian is the Past President of the Society of Financial Service Professionals, an alumnus of Harvard University, has authored 4 books, quoted over 1500 times in the media , has been host of a money radio show, a daily newspaper column, Wharton Fellow, SEACeM Fellow, acting managing editor and columnist for theonlinecitizen, columnist for Malaysiakini, a Member on the CIFA International Advisory Board, executive producer of the movie Ilo Ilo (40 international awards), treasurer of Maruah, and invited to speak more than 100 times in more than 25 countries on 5 continents. He has served as Honorary Consul of Jamaica and founding advisor to the Financial Planning Associations of Brunei and Indonesia. He has 3 Masters, 2 Bachelor's degrees and 13 professional qualifications.