The Cupcake is a phenomenal example of how marketing can lure us into buying or investing in something that we would normally never touch.

The simple sponge cake was one of the first things I learnt to bake as a child; 4:4:4: and 2 eggs results in a bland and inoffensive cake. Of course the fun was not in the eating but in the mixing, spoon licking and decoration.

Given the choice as adults we wouldn’t touch them with a barge pole, they are pretty tasteless and very fattening.  Strangely though in recent times they they have been adapted by marketing companies as the new wannabe gift,  a symbol of love, the accompaniment for champagne and a delight to the eye. ‘The perfect little treat’!  But Why?

The secret of course is in the presentation, its not the sponge cake we are attracted to but the decoration and sparkles on top, frosty icing, glittering balls, hand-piped messages and decorative cases. Pop 4 in a hand folded box and the deal is nailed. Serve with ice cool champagne for a fiver and we are hooked. Does cupcake and champagne even go together?

Like it or not the cupcake is selling, it’s everywhere.

The relevance to our investment choices is startling, only yesterday I was contacted by a land management company, they were selling plots of green belt land which were without planning permission. It’s a risky propossition with the potential for high return if planning permission is granted at a later stage.

Being a curious sort of person I asked for the brochure. The proposition  the sponge, the brochure and presentation a decorative cupcake. An alluring piece of marketing that made it look like they were selling a to die for product when if fact it was just sponge.

Of course, there is a chance that you could buy a cupcake that actually tastes nice; that after all is the expectation. However, consider the reality. The right ingredients have to be measured, mixed and baked. The cake has to be fresh, soft, light and the flavour superb.

Let’s face it when you have recovered from the appeal of its appearance most cupcakes taste pretty dull and ordinary. Come on its just a sponge.

The fact that pretty ordinary deals are wrapped expertly in glittering packages is a phenomena investors have to think about carefully.

What you should be doing is stripping off the icing and then decide  if you would still buy the cake.

You could argue that the icing adds an intrinsic value to the product which could facilitate an emotional response but, well worth a couple of £’s,  this argument wouldn’t hold much water though if you were shelling out 10′s of £000′s on a piece of land.

The message, beware the marketeer he is a clever and often devious character and is the reason that the following saying was coined.   ‘If it looks too good to be true it probably is’.