Mutual fund advertisements make exaggerated claims. What points should one check to avoid being taken in by aggressive advertising and smooth-talking salesmen?
As you already know by now, most mutual funds do not carry any guarantee. Neither are they insured by any bank or government agency. Even a fund carrying a bank’s name does not offer guaranteed returns. Knowing all this, if you see an ad which makes promises that seem too good to be true, check out for yourself the basis on which such claims are being made. If what your investigation turns up doesn’t match what has been advertised, you know who to believe! Secondly, check out the risk factor. Mutual funds always carry some investment risk or the other depending on the asset allocation of the scheme. Some types carry more risks than others. While you’ll find most of the risk factors in the offer document itself, it makes sense to do a bit of background research to uncover all potential risks that may not have been stated upfront. Don’t be taken in by claims of spectacular past performance. Like we mentioned earlier, past performance is not a reliable indicator of future performance and
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