# JB Global ASX 200 Deferred Purchase Agreement



## newbie2009 (26 September 2009)

Does anyone have an opinion on the deferred purchase agreement offered by JB Global at the moment to invest on the ASX 200.  I am brand new to the market and this offer was passed to me by a friend and it looks very good.  I can borrow money (at 3.9%) by paying upfront only the interest and entrance fee.  Locked in for 3 years and they invest in ASX 200.  But my son has looked at it and advised me to ask your forum as it is all about a deferred purchase agreement.  Does anyone know about these offers?

Thanks


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## investorpaul (26 September 2009)

newbie2009 said:


> Does anyone have an opinion on the deferred purchase agreement offered by JB Global at the moment to invest on the ASX 200.  I am brand new to the market and this offer was passed to me by a friend and it looks very good.  I can borrow money (at 3.9%) by paying upfront only the interest and entrance fee.  Locked in for 3 years and they invest in ASX 200.  But my son has looked at it and advised me to ask your forum as it is all about a deferred purchase agreement.  Does anyone know about these offers?
> 
> Thanks




Do you have a link to a website showing the info?

From what you have said it appears that you borrow 100% of the funds which JB Global then invest in the ASX 200. You stump up the interest only and in 3 years time you can sell your holding and hopefully you have a profit.

Seems high risk to me, especially for someone who is just entering the market. Say thy lend you $500k and in 3 years its value has risen to $650k you sell give back the $500k and you make $150k (less interest and costs). However ift he market is 30% lower it 3 years the $500k you borrowed is now only worth $350k so you need to find another $150k out of your own money (or sell your house, etc). You are basically 100% leveraged with no equity of your own.

As the market has risen over 50% there are many people who are expecting some form of pull back (ie if you bought on monday you could be buying near a short to med term high). So if there was a 20% pull back after you bought your going to be behind the 8 ball from the start. If you chose to go with the JB global thing you will need to get your timing right to.

Also how much is the entrance fee? my guess is it will be high. If you look at the storm financial thread youwill get an understanding of how companies like this make your money (ie high fees and try and keep you in the market even as its crashing).

I would be very very very very cautious with the scheme you have mentioned.

As always we cannot give advice so the above is my opinion only and i strongly recommend you do all your own research and consult an accountant, etc before making a decision.


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## Wysiwyg (26 September 2009)

investorpaul said:


> As the market has risen over 50% there are many people who are expecting some form of pull back (ie if you bought on monday you could be buying near a short to med term high). So if there was a 20% pull back after you bought your going to be behind the 8 ball from the start. If you chose to go with the JB global thing you will need to get your timing right to.




On investigating the newbie2009 cautious post, it is a buy near the top deal.



> Be quick. Applications close 2 October 2009.




Be good if you could choose when to enter. Like six months ago.


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## newbie2009 (26 September 2009)

Thanks for the replies.  Here is a link 
http://www.jbglobal.com.au/index.php?option=com_content&task=view&id=141&Itemid=366
I forgot to say it is protected by insurance.  I would love your opinion after looking at the link.  I know everything you say is not advice of any kind I am just glad to have someone to talk to about it.


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## investorpaul (26 September 2009)

newbie2009 said:


> Thanks for the replies.  Here is a link
> http://www.jbglobal.com.au/index.php?option=com_content&task=view&id=141&Itemid=366
> I forgot to say it is protected by insurance.  I would love your opinion after looking at the link.  I know everything you say is not advice of any kind I am just glad to have someone to talk to about it.




Insurance means nothing it the S### hits the fan (read Storm financial thread again). However I havnt read the PDS so I dont know how they are insuring it, etc

also:



> *Up to 150% exposure to the S&P/ASX200*
> 
> *No credit checks or lending criteria *




the bold bits scream caution to me


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