Many stock accounts, mutual funds and
other investment vehicles often have minimal requirements when establishing an account.
Not exact matches
This is evident in a number of developments, including: increased demand for higher - risk assets; the increase in «carry trades» — a form of gearing where funds are borrowed short - term at low interest rates and invested in higher - yielding assets,
often in
other countries; growth in alternative
investment vehicles such as hedge funds; and growth in alternative
investment strategies such as selling embedded options (see Box A).
The 2008 financial crisis, on the
other hand, was triggered in part by subprime mortgages — essentially, loans given to homeowners unlikely to be able to pay them back — and
investment vehicles based on them in which these toxic assets were bundled and
often hidden.
Stable and accessible:
Other financial
vehicles, like mutual funds, can post losses on your
investment, depending on market conditions, while accounts that guarantee higher returns
often come with additional restrictions on your access to funds, as with CDs.
This model of lending provides benefits to all parties involved; lenders
often earn higher returns than
other investment vehicles, borrowers have access to lower interest rates than banks, and the P2P lending company profits through marginal fees on each match they provide.
Often negotiated at a time when the
investment vehicle has no outstanding debt, sometimes the buy - sell provision contemplates only a disengagement of the parties» equity interests, but fails to cover off adequately
other «
investments» that may be made by investors on behalf of the business.
These
investments offer superior returns to Treasury bonds and
other traditional fixed - rate
vehicles, however, you may
often notice a curious omission: There is no information about the lender.