Sunday, October 12, 2008

Minibond invetors are not risk takers

Dear Mr. Tan

I think there is a way to prove that the investors are not risk takers. If an investor is interested to get a higher rate than those offered by FD, they would have invested in NZ FD as the rate was more than 7%.

As the investors are not willing to take currency risk, they are not willing to put their money into foreign currency FD. If that is the case, the investors are not risk takers and there is no reason why the investors are willing to invest in a high risk product like mini bond that offer only 5% with the risk of losing the whole investment if things go wrong. This argument has proven that it is obvious that the investors were not told of such risk in mini-bond investments by the RM.

I believe if the investors put up their cases in the above manner, their cases are stronger. Hope that the info is useful for the investor.

V