thanks guys for all the inputs.
Its a piece of pie thats not available readily to us.
1000 book challenge. 12 down, 980 to go
winston wrote:Hi behappyalways,
The following are my initial impression:-
1) When interest rates goes up, bond prices will come down.
2) And when interest rate spiked up sharply, the bonds would come down a lot in price, very quickly.
3) Need to also look at the terms of the bonds and whether they are callable or not. The companies will always select against you.
4) In times of crisis, the company may default . During the AFC, some blue-chip companies defaulted.
5) If the property value dropped by more than 30%, he will be required to top up on the amount.
Looks like an easy way to make some money but we all know that there's no free lunches.
And if there were free lunches, Lehman, Bear Stearn, GM and AIG will not be affected....
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