by The Investor
on April 28, 2009
A financial story gathering steam is the alleged miss-selling of structured investment products that ‘guaranteed’ your capital was safe.
The issue concerns products ultimately backed by Lehman Brothers, the failed U.S. investment bank.
Since what is left of Lehamn Brothers may be unable to honor its commitments as the underwriter of certain elements of the products, investors’ supposedly 100% secure capital is at risk.
The BBC’s Working Lunch program has been on the case:
On page four, under the heading “Full repayment of your capital at maturity”, you are reminded that the plan is “100% capital secure” and that you are investing in something with “growth potential without risking your capital”.
What you wouldn’t expect after reading all of the above is to be informed that all your money may have been lost due to the collapse of the US investment bank, Lehman Brothers, just weeks later in September 2008.
You didn’t even know Lehman was involved.
Investors’ capital is always at risk with every investment, but the word ‘guaranteed’ has a hypnotic affect on people.
In reality no investment product is ever guaranteed. It’s always about risk versus return.
[continue reading…]
Thanks for reading! Monevator is a spiffing blog about making, saving, and investing money. Please do sign-up to get our latest posts by email for free. Find us on Twitter and Facebook. Or peruse a few of our best articles.
{ }
by The Investor
on April 27, 2009
Most Mexican commuters won't be thinking about stock prices
Deciding how to react to a crisis like a potential flu pandemic, a natural disaster or war is one of the most controversial aspects of stock market investing.
Many panics, whether they affect the whole market or individual companies, turn out to be false alarms.
Even those scares that have substance often turn out to be less important than the market first anticipated.
In this article, I’ll divide panic scenarios into three categories, and discuss how I personally react to such scare stories when investing.
[continue reading…]
{ }
by The Investor
on April 25, 2009
Every week I read a large number of personal finance and investing articles. Here’s my latest weekly shortcut to the best.
[continue reading…]
{ }
by The Investor
on April 23, 2009
I guestimated in my rant about the new 50% tax rate introduced in the UK Budget yesterday that I wouldn’t be much better or worse off because of the various changes.
A quick skim this morning through the various online calculators that have popped up proves the point: I will be just a couple of good bottles of wine poorer, and that’s mainly because of the increase in duty on good bottles of wine!
Most of my gross annual income comes through dividends, since I run my own Limited Company. This means I’m not much affected by tweaks to the income tax system – the stalling of the increase from 21% to 22% in the small business tax rate is more relevant to me.
The new £10,200 ISA contribution limit will make a difference over time, but it won’t mean any immediate change in my living standards.
Wondering how the 2009 Budget has affected you? Interestingly, I’ve noticed there are two camps of Budget calculators on the big websites today.
[continue reading…]
{ }
