This week´s prize question:
What do a new “protected fixed income bond”, an award-winning “fully guaranteed investment”, and a “guaranteed buy-back of your hotel room at 125% of purchase price after 5 years” all have in common?
The answer may surprise you. Every one of these investments offers absolutely no real protection against a complete loss of the money invested by cautious/balanced investors desperate to make their savings work harder for them. And all three were sent to me by clients who wanted an unbiased opinion on investments that looked to meet their needs.
The first is little short of a scam. It offers a fixed rate of 5% per month (yes, 60% per annum un-compounded) and your minimum £100k is insured against loss. Until you read the T´s and C´s of the insurance policy and understand that there is no insurance against non-performance and no protection of capital against trading losses in the, erm, trading bond.
The second investment actually looks okay – but the guarantee is provided by a business based in Cyprus, audited by accountants in Gibraltar, and secured against alleged assets of £200m. For a £500k raise? The Gibraltarian accountants wrote the assessment in early 2017. And, a personal prejudice, the business is two surnames – for example Hudson Clark, Jackson Stevens or Fortescue Jones – which appears to be a trading style adored by spivs, fools and conmen.
And the third, a hotel room investment (possibly the least liquid asset this side of a store-pod), has a cast-iron guaranteed buy back offered by a marketing company that has no real assets. And who will certainly not be around in 5 years time to buy an asset that may or may not be yielding at the levels promised.
It is all very well saying that “Caveat Emptor” (buyer beware) applies but how a normal human being is supposed to cut through these layers of lies and misrepresentations is beyond me. Two of the three investments above were sent me by people who don´t have an investing history with Investment Owl or myself. I don´t mind. If something looks too good to be true, if you´re not sure, if you just want a second opinion………send it across and I´ll tell you what I think: firstname.lastname@example.org
9 out of 10 that I look at are best avoided but every so often a potential investor sends me something and it checks out.
We have just opened our East African office and the title of this blog – Abashooma Boolihamway phonetically – translates from Rukiga as “ Thieves everywhere”.