One of my New Year's resolutions is to lose some weight. So I started a strict diet on January 1st. I go to Dunkin' Donuts each morning and eat four jelly-filled doughnuts for breakfast. Mid-morning, I stop by Starbucks and get a Vanilla Crème Frappuccino. By lunch time, I'm really hungry so I go to McDonald's and get two Big Macs, a super-sized order of fries, and a large Coke. This will usually hold me over until dinner, when I go to see the Colonel and get a bucket of extra crispy fried chicken. And then I'll top it off with a stop at Cold Stone Creamery, and get Founder's Favorite ice cream.

To my surprise, I recently learned the above food purveyors don't care if I gain weight by eating at their establishments. In fact, they're more interested in me spending money than hitting my weight goal.

...Of course, I really don't eat like this. I used the fast food industry as a metaphor for so much of what passes for investment advice published by the financial tabloids. While McDonald's does have healthy salads and Cold Stone has sinless ice cream and non-fat smoothies, both of these businesses are primarily concerned with making a profit, not producing low-fat, nutritious meals. And the financial media is no different.

What financial magazine editors and television producers try to do is produce a product that people want to buy. That's why you see so many magazine covers with fund managers who have great investment records. Reading about hot funds, stocks, or sectors has never worked for investors trying to make money though, but it is a great way to sell magazines to those who aren't savvy about financial matters.

Just like a dieter cannot count on a fast food restauranteur to help them meet their goals, an investor cannot count on the financial tabloids to make them wealthy. The restauranteur and publisher have different objectives in mind when it comes to dieters and investors, and they're typically contrary to what is healthy for you, physically and financially, whatever the case may be.

Empirically based, naked strategies are created to achieve a financial objective and are not influenced by circulation, advertising, or fashion.

Full disclosure: I do own two Cold Stone Creameries. You can get a delicious, low-fat shake that I call the "Bob Special" at Cold Stone if you ask the crew members to mix sinless ice cream with milk and strawberries in a blender. Have them throw in a little chocolate malt too if you like...

Labels: investment choices, investment diet