Swaps pose new risk for your investment funds

Just when Private Investors would have hoped that a new, more rigorous regulatory regime would protect their assets from careless oversight - or outright fraud - the growing use of swaps by investment managers poses a new risk for the safety of investments. Most Private Investors - and many investment professionals and finance managers - have only the haziest of notions when it comes to the intricacies of swaps (and many other derivatives or 'structured' products) and therefore investors are well advised to obtain help when selecting suitable investment products.

Lunatics running the asylum?

This expression comes to mind when reading the judgement concerning the repackaging of a repackaging of notes that represented an interest in an investment fund. Anyone who thinks that the activities described in the judgement represent more than a pass-the-parcel round trip designed to harvest fees at every stop at the expense of (which?) real investors may well be the right candidate to be sold in-transparent investment products in the future. Anyone who scratches his head and asks: 'What does all this have to do with sound long-term investment?' is well advised to be wary of overcomplicated investment vehicles and scrutinise the costs and risks associated with his investments very carefully.