"Safe but unsound" When I thought of this prompt, the phrase "safe but unsound" made me think of securities products.
Many people have been affected by the recent Hong Kong H-index equity-linked securities (ELS) debacle.
At regular intervals, the threshold for early redemption of HK ELSs was barely exceeded. Eventually, 2024 arrived, and the three-year maturity of the 2021 ELSs began to return. The Hong Kong ELS losses had materialized. According to the BOK, if the Hong Kong H Index remains at its late February level (5678 points), investors' expected additional losses for the remainder of 2024 total 4.6 trillion won.
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I don't understand this financial instrument. I haven't even invested in the securities.
The problem is that the financial institutions that sold this product mis-sold it in a way that bordered on fraud.
The problem of elderly people joining investment products is not uncommon in Korea's financial industry, where employees' performance is based on product sales.
For example,
"Negative interest rates are hard to come by unless Germany goes under"
"It's unprotected, but the principal has never been paid back, and it comes out unconditionally."
What these statements do is make it sound safe, but they don't properly communicate the risk of the index falling.
The lack of explanation of the potential loss of principal is all the bank's fault.
They say it's safe, but we need to know about the losses behind it.
Investing is supposed to be prudent.
I heard a radio program about a retiree who invested his retirement money in the Hong Kong H Index and lost money.
The huge loss of funds for retirees' retirement has jeopardized his retirement life.
It was very sad news.
We really need to be careful with our investments.
Thank you for reading my post. 😀