New investment tools

As time progresses there are newer investment tools that come up - new ideas that make a lot more sense.

Today I visited my bank and the branch manager was trying to sell me an equity fund which basically is over a period of 10 years and the highest NAV gauranteed is 50% higher.

Here is the way she tried to sell it

1. Highest NAV will be taken in the first 6 yrs
2 . We are the only one giving you a gauranteed 50% increase in your capital.
3. Tax free returns

Now I tried to do a little bit of calculation and asked her a few more probing questions..

1. The 50% gauranteed is over what period.

The answer to this was ten years . a little back of the envelope calculations gets this to be around a 3% return.. Very similiar to a savings account return.. What's so exciting about this???

2.Guaranteed highest NAV- I asked her what is the guarantee that the fund manager will invest in a manner to get the highest return possible in the first six year- she had no answer to that

Why bank managers try and make fool of their customers I don't know.


However to her credit she did give me an idea about a debt policy that I thought was interesting - I will write about it as I investigate it further

Simple financial sense is about keeping it simple