Is this a risk? on 11:03 - Mar 29 with 767 views | StokieBlue | Nothing is risk free. With instruments like this the risk is a function of the interest paid. This should give you some idea of the risk that you may be running. There was reason why a few years ago the interest rates on German bonds were negative, that's essentially riskless. The question i would ask is what type of UK business needs to borrow off them at 12% to 20%, that's a massive risk premium. However, looks like they are regulated so if you invest less than the government insurance rate you'll get your money back when if they default i believe. SB | |
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Is this a risk? on 11:07 - Mar 29 with 742 views | gtsb1966 |
Is this a risk? on 11:03 - Mar 29 by StokieBlue | Nothing is risk free. With instruments like this the risk is a function of the interest paid. This should give you some idea of the risk that you may be running. There was reason why a few years ago the interest rates on German bonds were negative, that's essentially riskless. The question i would ask is what type of UK business needs to borrow off them at 12% to 20%, that's a massive risk premium. However, looks like they are regulated so if you invest less than the government insurance rate you'll get your money back when if they default i believe. SB |
Excuse my ignorance but are you saying my capital would be safe but it's just the interest could be a lot lower if it does badly. | | | |
Is this a risk? on 11:09 - Mar 29 with 725 views | hampstead_blue | They have a bad rep among the recruiters. Not a company I would recommend or allow to manage my money. | |
| Assumption is to make an ass out of you and me.
Those who assume they know you, when they don't are just guessing.
Those who assume and insist they know are daft and in denial.
Those who assume, insist, and deny the truth are plain stupid.
Those who assume, insist, deny the truth and tell YOU they know you (when they don't) have an IQ in the range of 35-49.
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Is this a risk? on 11:25 - Mar 29 with 687 views | connorscontract |
Is this a risk? on 11:07 - Mar 29 by gtsb1966 | Excuse my ignorance but are you saying my capital would be safe but it's just the interest could be a lot lower if it does badly. |
Disclaimer: This is not financial advice. I am not an IFA. I am licensed to give general money advice, but am not giving advice here. Stokie is spot on with the analysis about the (very) high interest rates being a function of the risk. I'm not so sure about the bit about being Government Insurance backed... if a financial institution fails completely then this kind of scheme kicks in, but if a particular financial product makes a loss on the market that wouldn't apply. Your capital, and that of everyone else who invests, would be loaned to businesses. If they go bust, you lose your capital. If there isn't be a major crash in the next few years then investors in higher risk corporate bonds will make a decent return. But if there is a major crash, they could end up with less than they invested. This is a "high risk-high return" investment. It's commercial sub-prime. Do you remember 2008? Always check the fee structure on any investment product. Is there a fee taken from your initial investment? How much? Look at the track record of tbe company and the named lead fund manager. If you can't find that information easily then that raises big question marks. Edited to add about "Government Insurance". [Post edited 29 Mar 2017 11:30]
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Is this a risk? on 11:27 - Mar 29 with 668 views | gtsb1966 |
Is this a risk? on 11:25 - Mar 29 by connorscontract | Disclaimer: This is not financial advice. I am not an IFA. I am licensed to give general money advice, but am not giving advice here. Stokie is spot on with the analysis about the (very) high interest rates being a function of the risk. I'm not so sure about the bit about being Government Insurance backed... if a financial institution fails completely then this kind of scheme kicks in, but if a particular financial product makes a loss on the market that wouldn't apply. Your capital, and that of everyone else who invests, would be loaned to businesses. If they go bust, you lose your capital. If there isn't be a major crash in the next few years then investors in higher risk corporate bonds will make a decent return. But if there is a major crash, they could end up with less than they invested. This is a "high risk-high return" investment. It's commercial sub-prime. Do you remember 2008? Always check the fee structure on any investment product. Is there a fee taken from your initial investment? How much? Look at the track record of tbe company and the named lead fund manager. If you can't find that information easily then that raises big question marks. Edited to add about "Government Insurance". [Post edited 29 Mar 2017 11:30]
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Thank you very much and the rest of you too. Advice heeded. | | | |
Is this a risk? on 11:31 - Mar 29 with 653 views | connorscontract |
Is this a risk? on 11:27 - Mar 29 by gtsb1966 | Thank you very much and the rest of you too. Advice heeded. |
I didn't give you any advice! ;-) | | | |
Is this a risk? on 12:53 - Mar 29 with 551 views | StokieBlue |
Is this a risk? on 11:25 - Mar 29 by connorscontract | Disclaimer: This is not financial advice. I am not an IFA. I am licensed to give general money advice, but am not giving advice here. Stokie is spot on with the analysis about the (very) high interest rates being a function of the risk. I'm not so sure about the bit about being Government Insurance backed... if a financial institution fails completely then this kind of scheme kicks in, but if a particular financial product makes a loss on the market that wouldn't apply. Your capital, and that of everyone else who invests, would be loaned to businesses. If they go bust, you lose your capital. If there isn't be a major crash in the next few years then investors in higher risk corporate bonds will make a decent return. But if there is a major crash, they could end up with less than they invested. This is a "high risk-high return" investment. It's commercial sub-prime. Do you remember 2008? Always check the fee structure on any investment product. Is there a fee taken from your initial investment? How much? Look at the track record of tbe company and the named lead fund manager. If you can't find that information easily then that raises big question marks. Edited to add about "Government Insurance". [Post edited 29 Mar 2017 11:30]
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Good response. Thanks for the clarification on the government insurance, i wasn't sure how bond defaults were handled in the scheme. I'm on much sounder footing when discussing risk. SB | |
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