Here’s how to avoid making a dog’s dinner of your investments
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Cooks and investors should avoid risky outcomes wherever possible, says financial expert Peter Sharkey.
Browse through any weekday television guide and it soon becomes apparent that much of the nation must be obsessed with cookery programmes. They clutter the TV schedules like discarded junk consigned to the attic, yet some viewers must love them. Television companies adore them too because they're so cheap to produce - very few people get paid to appear on them.
Ironically, the average Briton spends more than five hours a week watching other people cook on TV and just four hours in the kitchen cooking themselves.
Moreover, given the continued rise in child obesity levels and lifestyle ailments such as type 2 diabetes, there is absolutely no evidence that people are eating more nutritionally.
Despite this, sales of cookery books continue to delight publishers and bookstores alike as I discovered recently.
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A delayed train from which I had arranged to collect a friend afforded an opportunity to enjoy unexpected treat and head towards a large WH Smith for an hour before wandering back to meet the train.
The store's mountainous display of cookery books, piled high at the entrance, demanded attention, so I decided to take a look.
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Many were little more than oversized 'coffee table' publications, their recipes and ingredients so obscure, (unless you live in a hipster enclave and can pick up fresh Japanese shiso leaves or Peruvian maca at the corner shop) they're unlikely to be of any use to 99pc of the population.
Others followed a slightly different template. These were the celeb-endorsed, beautifully-photographed books oozing with a chatty, 'I'm-on-TV' style.
Almost all comprised short sectional introductions in which the celeb speaks about his or her love of country x or y and its wonderful people. Then there is a compulsory reference to a holiday in said country where the celeb first sampled dish a or b, followed by a suggestion of how the finished dish should be served.
Other cookery books smacked of emperor's new clothes-style content.
In French, Chocolat chaud avec pain grillé, beurre et confiture sounds considerably more mouth-watering than a hot chocolate with buttered toast and jam, but that's what the warm, engaging image opposite this 'recipe' showed. I was amazed that anyone could spend money to discover how a 'celeb' (another I'd never heard of) showed readers the best way to toast a few rounds of bread and add a dash of jam. Are paying customers that gullible?
Admittedly, there are many outstanding cookery books capable of complementing any kitchen, but they don't all deserve such an accolade. Investment can occasionally appear remarkably similar.
At the respectable end of the investment market, what might be called the Mary Berry/Delia Smith/Nigella Lawson area, are regulated fund managers, financial advisers and professional organisations that take seriously their duty to avoid over-estimating returns or telling prospective investors that investment x will make them stupendously rich overnight.
Meander a little 'off-piste', however, where investment returns appear significantly more attractive, and you're well advised to remember that investor protection is almost non-existent.
Bullish sorts might conclude that taking risks with unregulated markets or products is something they're prepared to do and such attitudes are fine provided investors avoid putting all of their eggs in one basket.
The buy-to-let market is a good example of an unregulated market which attracts thousands of investors who tacitly acknowledge the risk they're taking. Others are content to spread their capital across a range of crowdfunding opportunities on the basis that perhaps 30pc of them will produce a decent return, while possibly 1-2pc could hit the jackpot; in all probability, the rest will break even at best.
Risk-taking isn't everyone's cup of tea, but risk can be negated to a large extent by not putting too much money into an unregulated investment. Over-committing resources to an area that could result in heavy losses can be devastating.
As markets remain jittery, there could be great merit in more cautious folks saving via well-established investment managers able to offer a spread of opportunities befitting their caution
It might sound like the investment equivalent of having Berry, Smith and Lawson working as guides in your kitchen rather than some z-list 'celeb' telling you how to make cheese on toast and charging a fortune for his 'advice', but it will prevent you from making a dog's dinner of your investment activity.
TAM Asset Management Ltd offer savers the opportunity to invest in a variety of Investment ISA portfolios and through other investment accounts. For further details, please visit the MoneyMapp website.
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For more financial advice, check out Peter Sharkey's regular column, The Week In Numbers.