"Well now" says Dikkii, "What have we here?" That's as it should be though because normally, if I had a query concerning the scary world of finance, I'd ask Dikkii. It's a simple fact of life that if you want an informed answer, ask someone that knows a thing or two about the subject.
I call myself "Plonka", not because there was a mathematician of that name - I didn't know that when I chose the name - but because I "plonk" along. I tend to waffle on a great deal about things I know very little about with only the tenuous pretext of scant research, usually at Wiki, to back me and I wait for the blogophere to correct me. It's fun, I make friends and learn as I go.
There are however, some things I know with absolute certainty. One of those things, and herein lies the "tip", is that if a man says to you "I can get you a 70% return on investment", your best course of action is to thank him for his time and politely show him the door, the other side of it for preference. On this point, I'm sure Dikkii will agree with me so I feel confident in sharing this advice.
From The Age:
Mr Hoy's company, Chartwell Enterprises, reportedly promised investors returns of up to 70%. Instead, many were left watching in disbelief yesterday as the locks were changed on its offices in Geelong's Ryrie Street.
"In disbelief"... Surely they can't be serious. Someone even scratched the word "liar" into the door of his Jag. Really? I would never have guessed. He also owns a $900,000 Rolls, a luxury ocean cruiser and a $3million sub-penthouse apartment that isn't built yet. But then if you're a con that's trying to lure people, then the greater your advertised return, the better you have to make it look and this guy did it with style and to great effect.
The basic lesson here is "the greater the return, the greater the risk". I learned that at school in "home economics" (*sigh*...I show my age....) many years ago, and it seems to be one of very few things in the financial world that has remained steadfastly constant throughout that time. I may not know what a "good rate" is at the moment but I do know that 70% is laughable. Sure, some have managed to do exceedingly well at times, but a sustained 70%? Well even the great Mr. Buffett would have trouble with that one I think...