Friday, February 15, 2019

How did this retiree lose 95.5% of her investment?

A retiree invested $250,000 with a bank. She lost 95.5% of the investment. The value of her investment is now $11,200. What type of investment is this?

Some people speculated that she bought the Hyflux Perpetual Securities. However, these securities are now not traded. It does not lose 95.5% of the value. There is no market now, as the shares and bonds are suspended. The indicative value of the bonds show a drop of 52%.

She could have invested the $250,000 in dual currency investments. If she did, how could she have lost 95.5%? Even if the reference currency had dropped 20%, she would have lost only 20%. She also had the choice of holding the reference currency and hope that it would rebound some time in the future.

What actually happened?

No comments:

Blog Archive