Investment Advisor Differences: Not All Are Created Equally

We see yet again how the financial industry tries to mislead advisors and investors. Become educated and remember–you can’t always believe everything you read! Putnam Absolute Funds came out in early 2009 after the market had collapsed (along with hundreds of other mutual funds–see MF Deception). Mutual Funds success (how much they make) is directly related to their returns so the funds press for ways to be deceptive and manipulate returns. Incubator Funds, Survivorship Bias (where a poorly performing fund is merged with a good performing fund thus forever eliminating their returns from reporting), and other strategies gives the ‘illusion’ that the fund is performing well. The problem arises in a down market as to how to get investors money off of the sidelines or into new funds. Advisors ‘sell’ based on PAST PERFORMANCE which has absolutely no bearing on the future. So what do you do if you are a Mutual Fund, Brokerage House or Advisor??????

Sell a great new fund designed for markets like this, of course! Enter Putnam Absolute Returns……..they earn clients returns in good markets or bad with their strategies (I’m just repeating their marketing garbage–in the old days we’d call it lies but we are in a politically correct world). The next thing to do is to get Advisors (salespeople) to believe in your product and the ‘pitch’ they offer. So below you will find the incredibly inaccurate and deceitful chart in Investment News describing this new fund. The chart is amazing……too bad most investors or Advisors won’t read the fine print to realize it has nothing to do with Putnam Absolute Return Fund and is highly deceptive since they are comparing two widely different asset classes.

One day I pray Advisors and Investors wake up to the games that are played with their money and futures. One last thing, who cares about past performance? Love to hear some blog responses to this one.

Putnam Chart