Monday, July 19, 2010

Poll Results: Which is the most toxic investment product

In a poll that I recently conducted on this blog, I asked the simple question to readers:

Which is the most toxic investment product?

All investments are subjective are their investors believe that they will rise in value and thus invest in them. Toxic investments or assets are simply things that lose their value such that there is no way to liquidate them for any money. Whether investment products are toxic........we can only tell based on hindsight I guess. On hindsight, we are now certain that subprime mortgages are toxic assets. But whether other investment products are toxic or not, we can only wait and see.

Poll Results - A total of 22 votes were cast

1. Land Banking (54%)
2. Insurance Products (18%)
3. Wine Investment (27%)
4. Shares (0%)

Analysis of Results

The poll showed that more than half felt that Land Banking was a toxic investment product. Wine Investment was next followed by insurance products. Nobody felt that shares is a toxic investment.

The reason why Land Banking got so many votes is perhaps due to the recent Straits Times article on it being unregulated. Mr Tan Kin Lian has also highlighted the pitfalls of investing in land banking on his blog. The low liquidity of this investment product coupled with the risk involved makes this a fairly risky product to a certain extent.

Interestingly, noone rated shares as toxic or risky even though there have been cases or debacles of shares becoming worthless overnight. Just think of China Print and Dye, etc. These shares just lost value overnight and became totally without value. Isn't that toxic?


5 comments:

  1. Shares are risky but not toxic. You have absolute control over it. You can sell or hold. If you hold until zero. Blame yourself.

    ReplyDelete
  2. Hello, I like your honest sharing on your blog.

    I did a post on investment scams and quoted your poll results. You can take a look here
    http://www.bigfatpurse.com/2010/07/wealth-is-about-value-creation/

    Keep in touch!

    ReplyDelete
  3. Buying shares is like gambling. Just that it is a more expensive gambling bet. Even if you do dollar cost averaging, at the most it is educated gambling. People can commit suicide when they lost all their fortune in gamling. Hardly, hear of people commit suicide because of other investments... oh yes, maybe commit suicide after 1 year to get insurance money.

    ReplyDelete
  4. Is stock investing also like gambling?

    http://createwealth8888.blogspot.com/2010/07/help-me-i-am-still-losing-money-in-my_22.html

    ReplyDelete
  5. Thin line between investing and gambling ....very thin line..

    ReplyDelete

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