At 3:30 AM -0600 11/13/03, Mike Schneider wrote:
[in another thread]
>Meanwhile, I gotta track down a rumor of a Monte Carlo bank
>offering 22% interest on numbered-account deposits.....
It's quite easy to find 22% interest rates on bank deposits.
That is, if you don't care what currency. Banks in Costa Rica I believe
offer more than 22% on colone deposits. (The colone devalues
about 20% per year against the dollar).
Seriously though, why in the world do you think a Bank would offer an
interest rate that is grossly disproportionate to the market?
If a bank is offering 22% (on dollars or euros), that means that it is
unable itself to borrow at competitive rates, and that it is engaging in
high risk loans or investment speculation. A good formula to loose
your money.
There's nothing wrong with accepting investment risk, but do so with
investments that make their risks transparent, so you can evaluate and
diversify.
High yield low risk is an oxymoron, risk and yield are positively correlated.
Adam
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