Julia
In Memoriam
- Joined
- 10 May 2005
- Posts
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Thanks for saving me the trouble, Bill.As an investor of Hybrid the securities the simple answer is risk. There is no risk with a Term Deposit and it is government guaranteed. Suncorp was looking really unsafe and all their hybrids were well down up until the magic wand was waved by the Government Guarantee. In an instant the guarantee provided security again and the deposits that Suncorp needed came flowing in. The stockmarket was collapsing in a massive way and there was talk about risky loans in Gold Coast Property developments going sour, no one wanted to go near Suncorp and their shares tumbled but that was then and all is rosy again. I currently own a Suncorp Floating Rate note and it is trading at $65 which is a massive 35% loss! Personally 8% at no risk is far better than 7.8% with big risk and no guarantee. I'm not saying there is no money to be made in Hybrids, you just got to choose the right ones.
Good point, communique.Only one problem - the government guarantee was only put in place for a period of 3 years. We are already one year into it.