16% return - how can they do it ?

negativenick


Joined: 10/11/2008
Posts: 6023

Message Posted:
27/09/2009 23:06

Was just chatting to a pal who reccons he's getting 16% from FMA in Girne....



"guaranteed" too, apparently (last time i heard the word "Guaranteed", it was when they guaranteed Hitler wouldn't invade Poland...)



With 8% on offer from HSBC and 10.5% from Credit west....



Just how are they doing it - and more importantly, who are they lending the money too, to achieve such a high rate ??

frontalman



Joined: 28/02/2008
Posts: 499

Message Posted:
28/09/2009 10:07

I've heard of schemes in the UK where your interest was guaranteed but your capital return was not. I don't know how the FMA scheme works, so wouldn't dare hazard an observation on it. Just hope those who have taken up this offer have read all of the small print.

negativenick


Joined: 10/11/2008
Posts: 6023

Message Posted:
28/09/2009 10:09

FM - as the expression goes "if it sounds too good...."

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
28/09/2009 10:10

Simple rule of economics: the higher the gain, the higher the risk.

ismet

wanderer


Joined: 05/02/2009
Posts: 1653

Message Posted:
28/09/2009 10:14

Ismet comment is correct

Have they an ISO number from the central bank?

Also if they go you wont be able to afford dirt!!

exnavalperson


Joined: 22/07/2009
Posts: 224

Message Posted:
28/09/2009 17:03

What about an explaination from FMA?

Tenakoutou



Joined: 27/07/2009
Posts: 4110

Message Posted:
28/09/2009 17:07

I'd be more than a little bit worried about them getting my money 'muddled up' with their own!

DutchCrusader



Joined: 19/05/2008
Posts: 11280

Message Posted:
28/09/2009 17:44

As usual: a lot of speculation without bothering to ask the questions at the source. Here you can do it: Scott Kennedy, Astute FMA.

Phone work: 03928158275 and 03928158276, mobile: 05338457296 and 05338423589.

email: scott@fma-ltd.com, fmaltd@gmail.com and info@fma-ltd.com

minertor



Joined: 14/02/2009
Posts: 1238

Message Posted:
28/09/2009 18:36

Don't spoil it, Hans, we LIKE to worry, it's what makes us Brits.



Tony

melbrandy


Joined: 23/08/2009
Posts: 44

Message Posted:
28/09/2009 19:46

The latest version of a guaranteed return fund from FMA that i know about, is where your turkish lira goes into a property fund. This fund then invests in development property, both commercial and residential, in a number of regions in Australia. The fund that does the investing is a small but well regarded outfit resident in Australia but with subsidiaries in Hong Kong and UK etc.

Your cash has to stay in the fund for a minimum of 12 months, the income is gauranteed but not the capital amount you initially put in. Not much call for turkish lira in Australia so it is in fact converted into aussie dollars and then hedged with forward exchange contracts so that you get back turkish lira interest and capital.

This is my understanding, do your own research.

negativenick


Joined: 10/11/2008
Posts: 6023

Message Posted:
28/09/2009 19:59

mess 10 - so as my old uncle Percy used to say "so it aye garanteed".....

cyprusishome


Joined: 31/03/2007
Posts: 2381

Message Posted:
30/09/2009 00:23

Anyone who is stupid enough to take the risk must have plenty of cash available.



FMA were offering 20% return in a market with quickly falling equity rates, msg 10 actually spells it out "but not the capital amount you initially put in".



So you may have a 20% interst payout at the end of 12 months but your capital is gone!!!!!!



Come on everybody you have seen it all in the press on and off over the last dozen years, invest in these things if you have cash to burn otherwise keep away. There is no such thing as a free lunch as economists will tell you. DOH, that is me!!!!!

wagon


Joined: 01/04/2009
Posts: 154

Message Posted:
30/09/2009 09:09

All that glitters is not gold

girne


Joined: 14/01/2009
Posts: 438

Message Posted:
30/09/2009 10:03

Scott have you an ISO number if not then you have no guarantee!!!

Aussie


Joined: 17/06/2007
Posts: 657

Message Posted:
30/09/2009 11:51

Ultimately if the investment ends up being put into property development in Australia or elsewhere it is always at high risk. Having done a lot of development finance over the years such funds are usually very highly leveraged often lending close to 100% (sometimes/ often on a second mortgage basis) of the costs of the development based on the more comforting assumption that on completion of the apartment etc the loan should represent say 70% of the end value when completed. Of course if all goes well there isn't a problem but if the project suffers from cost blowouts or the real estate market weakens or any other adverse events occur the 30% buffer can very quickly be eliminated. In the last few years many funds in Australia focusing on lending for development and other high risk lending went broke costing there investors a large proportion of their money.



Basically you need to know exactly where your money ends up and for what purposes it is being used for.

lovingcyprus


Joined: 02/03/2007
Posts: 1272

Message Posted:
30/09/2009 11:51

Message 10 is I believe correct, whilst the the income is guaranteed at say 16% your capital is at risk, your capital can fall significantly.



It is a bit like UK Government Gilts the Government issues a gilt at 100p, which promises to pay a fixed income - known as a 'coupon' - twice yearly for say 10 years after which they will return your 100p (known as redemption). However, if you want to sell your holding before the end of the end of 10 years you will only receive the current value which maybe more than 100p or less than 100p

Aussie


Joined: 17/06/2007
Posts: 657

Message Posted:
30/09/2009 11:54

Professional property development investors demand very high returns to cover the risk of loss that inevitable occurs at some time





In general as mentioned by others above the higher the return the higher the risk.



Also always be wary of guarantees and what they cover and what funds or institutions back them up and an unsupported guarantee isn't worth the paper its written on.



Aussie

coffer


Joined: 13/02/2007
Posts: 292

Message Posted:
30/09/2009 12:56

I have been advised by FMA for the last year, they are IFA not an investment company and therefore never see any of your money. The funds I have invested in are all with strong, high performing investment companies. They can all be researched independently and on the web in order to make your own judgment. Of course there are risks, anyone who has been investing in the UK over the last 2 years can vouch for that! You pay the money and take your chance. FMA provide straight forward honest advise, if you arn't happy, put your cash in ING @ .5% or under the matteress. The way the pound is dropping you would have lost 10% taking either of those options!

colly


Joined: 31/07/2008
Posts: 297

Message Posted:
30/09/2009 15:38

Just lost a 1000 character message but the message was



The higher the return the higher the risk. No research required as history has proven this.



Col

lovingcyprus


Joined: 02/03/2007
Posts: 1272

Message Posted:
30/09/2009 15:51

coffer



Don't make me laugh strong high perfoming investment companies can and do suffer losses.



I seem to remmber that Lehman Brothers were highly thought off, can you reminder me what happened to them.



Also the Icelandic Banks offering high interest rates were highly rated by the likes of Standard & Poors and Moody's, can you remember what happened to those.

Cyprusraider


Joined: 08/04/2009
Posts: 99

Message Posted:
30/09/2009 16:16

Don't forget Baring's

ricky


Joined: 26/01/2009
Posts: 294

Message Posted:
30/09/2009 16:41

Madoff & Co. Some people will never understand...!

coffer


Joined: 13/02/2007
Posts: 292

Message Posted:
30/09/2009 16:45

Message 20- I wasn't trying to make you laugh, I was making a serious point!

Of course they may suffer losses that's exactly my point! Which I will repeat, if you cant afford to loose it put it under your mattress, but your money may still depreciate and so will be worth less when you want to use it. Or you could put it into one of the banks which 'appear' to be more solid and get 1% interest, ditto result.

JohhnyLee


Joined: 25/04/2009
Posts: 2495

Message Posted:
30/09/2009 21:06

It,s very easy, I have a friend in the UK, who will give you 22% tax free, paid monthly. you will have to tie your money up for two years , and there is no gurrantee on your lump sum, thats how easy it is.

colly


Joined: 31/07/2008
Posts: 297

Message Posted:
30/09/2009 23:44

Coffer,



you can do much better than 1% and so long as you keep within the limits of the guarantee system you are 100% secure. Even the tax free bonds give something like 2%. 4% is commonplace in the UK.

As for the pound dropping it can go up as well as down, indeed there have been millions made in one evening using the strength of the pound but for us at least at the end of the day we still have our pound.



Col