Beware of the High Return No Risk Promise.
You may recall my comments a few weeks ago in regards to Fincorp and Westpoint. These were the two property investments which were cleverly marketed to people who were chasing high returns but no risk. I say cleverly as when both of these fell over the investors lost everything. While this was happening, where was the corporate watch dog the ASIC. No one is really sure but this week I note that they have come out and stopped the latest prospectus for Australian Capital Reserve (ACR).
ACR is the company which has the ad of the little old lady playing bowls with her friends except she has an advantage, her ball is three times the size of a normal ball. As someone chasing a big return you most likely look at this ad and think, yes, big return and low risk as little old ladies invest in it. As the little old ladies who invested in Fincorp and Westpoint found out all too late, this is a typical high risk and high return.
Moral of the story; these investments are complicated and you should never invest in them until you speak to your adviser. Sure it will cost you some money and time, but is better to pay a little now instead of the lot later. Oh, do not think that ASIC has got your back, they issued a number of warnings to Fincorp about their advertising but made no effort to let the investors know about their concerns.