Hello everyone.
Due perhaps to the unfortunate ( for now ...) commercial paper issued by New Rumasa is it up to recall the nature of this investment vehicle. Basically, this is debt securities issued at a discount so its profitability is obtained as the difference between purchase price and the nominal value of the note is received on the redemption date. During its lifetime, will be paid a pre-agreed interest and manipulated, in most cases, a quarterly coupon . Typically many commercial paper are instrumentalized as perpetual income so that we will be "graceful" to profitability as long as we agreed the note holders.
As we see, this is a financial resource that companies try to raise funds short term and with some haste, so that compensation of this investment product can be well above that offered, for example, the typical bank deposit ... and it is logical: Generally these notes often do not have any warranty so that, ultimately, are only guaranteed by the good name of the issuer or the rating more or less solvent in any entity " rating, circumstances that have influenced more by the time we want to get rid of the note, if the issuer has made an explicit commitment to repurchase ...
me explain: if, say, gave us notes Telefónica to 5% return for five years, will enjoy free use of the quarterly coupon and we will repurchase the note issuer to a value agreed at the end of that time. If, for example, need the money before that date, it is easy, taking into account the creditworthiness of the issuer, we may alienate the secondary market (which is where these instruments are traded) lost little or nothing to investment as "no turn around" interest rates. But if the note is from a company that makes puddings and yogurts and, God forbid, fall into preconcursal situation, besides the predictable difficulties in collecting the coupon, our last note to be worth almost nothing ...
should therefore, be scrupulous when undertaking an investment that has as its object and eligible commercial paper issuers only for recognized reliability. In addition, the nominal value of each of these investment instruments means that, for the average investor, it is difficult to enter and obstruct further diversification of investment, one of the commandments of good investor header.
Greetings!
www.NLSasesores.com
As we see, this is a financial resource that companies try to raise funds short term and with some haste, so that compensation of this investment product can be well above that offered, for example, the typical bank deposit ... and it is logical: Generally these notes often do not have any warranty so that, ultimately, are only guaranteed by the good name of the issuer or the rating more or less solvent in any entity " rating, circumstances that have influenced more by the time we want to get rid of the note, if the issuer has made an explicit commitment to repurchase ...
me explain: if, say, gave us notes Telefónica to 5% return for five years, will enjoy free use of the quarterly coupon and we will repurchase the note issuer to a value agreed at the end of that time. If, for example, need the money before that date, it is easy, taking into account the creditworthiness of the issuer, we may alienate the secondary market (which is where these instruments are traded) lost little or nothing to investment as "no turn around" interest rates. But if the note is from a company that makes puddings and yogurts and, God forbid, fall into preconcursal situation, besides the predictable difficulties in collecting the coupon, our last note to be worth almost nothing ...
should therefore, be scrupulous when undertaking an investment that has as its object and eligible commercial paper issuers only for recognized reliability. In addition, the nominal value of each of these investment instruments means that, for the average investor, it is difficult to enter and obstruct further diversification of investment, one of the commandments of good investor header.
Greetings!
www.NLSasesores.com
0 comments:
Post a Comment