A friend of mine has recently lost about 45% of it’s value in unit trust due to credit crunch crisis. What will happen to her investment if the the bank were to collapse? Are we protected by government, authority or any law that will ensure us in getting back our investment or even part of it? It remind me of the minibond saga. It baffles many investors that the once low risk and guaranteed paper investment with annual returns is now no longer safe. The Lehman Brothers saga has cause many investor trying to salvage whatever left for them. You can read some of it here. According to the CNA report, Lehman brothers minibond investors will know their options at the end of the month: one, whether restructuring of their investments is still a viable route or two, if they will be liquidated.
Why does a low risk investment scheme causes investor to loose everything? Listen to some of the upset investors have to say;
It’s really disheartening when I listen to their grievances. Many of them lost their savings overnight. Will the credit crisis worsen? Take a look at US, under the Bush administration, the US national debt has risen from $5.7 trillion, to over $10 trillion currently. The terms of the recently-passed bailout legislation increased the statutory debt ceiling to over $11.3 trillion. I wonder where does the government going to get their money from? Steve Keen, the Australian economist said if the debt pyramid come crashing down via a violent and uncontrollable chain of defaults, even the safest risk-free rate of return government bond market will be drag down with it.
Many investors are now turning to precious metals such as gold that would rapidly regain monetary status in such a scenario. If you diversify your portfolio, invest some physical gold as a form of financial insurance. It is a universal finite currency, held by every central bank of note in the world. For more information about gold investment, contact me at albe_chong [@] yahoo.com
[...] YourFunds.org wrote an interesting post today onHere’s a quick excerpt A friend of mine has recently lost about 45% of it’s value in unit trust due to credit crunch crisis. What will happen to her investment if the the bank were to collapse? Are we protected by government, authority or any law that will ensure us in getting back our investment or even part of it? It remind me of the minibond saga. It baffles many investors that the once low risk and guaranteed paper investment with annual returns is now no longer safe. The Lehman Brothers saga has cause many inve [...]
[...] Low Interest Rate Credit Cards – wrote an interesting post today onHere’s a quick excerpt A friend of mine has recently lost about 45% of it’s value in unit trust due to credit crunch crisis. What will happen to her investment if the the bank were to collapse? Are we protected by government, authority or any law that will ensure us in getting back our investment or even part of it? It remind me of the minibond saga. It baffles many investors that the once low risk and guaranteed paper investment with annual returns is now no longer safe. The Lehman Brothers saga has cause many inve [...]