I love cappuccino, and start each workday morning with one. Frequenting different establishments, I have noticed the misuse of the ‘gloved hand’. You may have seen a coffee shop attendant or sand- wich maker who has one hand enclosed in a surgical glove.

A good sign, suggesting the establishment takes cleanliness seriously. However, for some odd reason, when it is time to pay, they accept your money with that gloved hand.

Are you kidding me? I thought the glove was to ensure that the ‘3 million’ bacteria inhabiting the palm of a hand are not transferred to you via a cheese and salad sandwich.

By accepting money into this gloved hand rather defeats the purpose I would have thought. Sud- denly, what started as a good impression of the establishment is quickly shattered. If this is happen- ing before my eye’s what’s going on in the backroom!

I believe the same could be said about our financial institutions when they advertise superannuation or managed investment funds. Take a look at any advertisement for these types of products, and usually, the most prominent feature is the rate of return.

Now, this rate may be last year’s return or an average of the last 3 or 5 years returns. Whatever the figure, it will be historical. Now look closely, do you see an asterisk. Right there, next to the gigantic ‘fonted’ rate of return – an ‘incy wincy’ teeny weeny little asterisk. A cute little fella, but deadly when used in the investment world, I can assure you.

Now go to the foot of the advertisement and find the corresponding asterisk. There among other bits of information will be the following; ‘past returns are no indication of future performance’ or similar. Mmmm ‘then why did you tell me a past return?

That one sentence next to the asterisk rather defeats the whole purpose really. It is somewhat akin to being given the name of last year’s Melbourne Cup winner; may be interesting to know for some trivia night in the future but it certainly won’t make you any money today!

Make sure you take a close look at the fine print. Large ‘promises’ of expected returns are always ac- companied by small print denying any such thing will happen!

Products like superannuation have a multitude of facets to them, all of which need to be considered when looking at changing funds or investing for the first time – last year’s investment return is certainly not one of them.

Thanks for reading, see you next time. Homepage