All About Actively Managed Investments
What if I told you that I am a world-class coffee brewer and my coffee tastes wonderful, better than all my competitors. Since my coffee is so amazing I command a premium of over 17 times the national average price of $1.38 for a medium cup of coffee. I charge between $24.00 and $34.00 per cup depending on the flavor. That’s how freaking good my coffee is!
However, Here’s the embedded risk that you won’t know unless your read my product offering memorandum:
- If I am able to pick the right coffee beans, at the right time and brew them correctly, then you will likely have above-average coffee for long periods of time.
- I can’t guarantee my coffee will be “the best” all the time, in fact my coffee could taste far worse than the average cup of coffee on any given day. Although, I believe it to be unlikely.
- There is upwards of a 50% chance my coffee will taste the same or worse that the average cup of coffee.
Knowing what I just told you, would you pay $24.00+ for a cup of my “maybe it will be great, maybe not” coffee? That’s asset management!
Well Ladies and gentlemen: Welcome to the asset management business!
Please come and purchase my active mutual fund (i.e. premium coffee), but here’s what you won’t know unless your read my prospectus:
- If I pick the right investments and buy and sell them at the right time, you will likely earn a superior return on your investment.
- I can’t guarantee your investment returns will be above greater market returns.
- There is an upwards of 50% chance that I will underperform the s&P 500 index.