MutualFundWire.com: Seven Ways to Benefit From the Tech Selloff

MutualFundWire.com

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an InvestmentWires' Publication

Tuesday, April 20, 1999

Seven Ways to Benefit From the Tech Selloff

"Seven Funds for Troubled Times!" Not a real headline, but we wouldn't be surprised if it was one by the time the June issues of the personal finance magazines come off the presses. Indeed, nothing typifies this bull market more than breathless headlines recommending the right funds for the moment.

Before you eschew the coverage as nothing but a worrisome encouragement to investors to time the market, you may want to step back a moment and see if you can use the process. If you are one of the fund companies offering strong value and cyclical funds that are suffering investor flight -- Vanguard Windsor comes to mind, as do Banc One and John Hancock (the woes of the latter two are documented in today's Odd Lots column) -- it is time to seize the moment.

A mention in these stories is, after all, free marketing that can get your story to hundreds of thousands of investors and financial advisors for free.

So what can you do to bolster your chances of ending up as one of the select funds. Based on our experience with the media we offer seven easy steps:

Be prepared. The Boy Scouts were right. Have a strategy ready to go before the market environment changes to your advantage. In the recent past market shifts have come and gone so quickly that unless you are ready you risk being caught flat-footed.
Script your story. This doesn't mean that you read the script to the reporter, but that you know what you want to say before talking to the press.
Promote your story. You need to actually have a safe fund to tell your story, but having this fund is not enough. With more than 14,000 funds, others have the story also. Call the editor and make sure they know your fund is a worldbeater this month.
Check your record. Morningstar, Micropal, Wiesenberger, Lipper, and Value Line are not always right. Check your funds' numbers and make sure that they are right. Make sure your fund is included in their databases.
Return the call. If a reporter calls answer the phone. Get the fund manager on the call! There are plenty of funds and the press usually goes to those that are accessible.
Keep it Simple Stupid. Complexity can only lead to confusion. If a reporter does not understand your story, he or she will not be able to tell it to potential investors. Keep things simple.
Educate the new investors. Once you have them in the door, start to educate your new investors. Develop materials that explain your story so they will stick around and not become "hot money." Hold conference calls for advisors so they understand how the fund fits into their strategy and they are not surprised the next time the market turns.