Wednesday, August 29, 2012

20% Guaranteed Return through GOLD ?

Have you ever heard of an investment with Guaranteed Return 20% ?  Well, this particular one is from The Gold Guaranteed . . . what do you think the catch is ?

  1. You Buy Bullion Gold from TGG ( The Gold Guaranteed )
  2. You keep the gold
  3. You sign a 3-months-contract with TGG
  4. TGG pays you 1.7% every month
  5. At the end of 3 months, you can choose to 
    1. renew the contract for another 3 months or
    2. sell the gold back to TGG how much you have paid for ( ie. your Capital ) 
  • To renew the contract, you have to pay the additional cost if the gold price has gone up
  • Like wise if the gold price has gone down, you get paid extra and also gets to renew the contract

For example, at end of August . . .
  1. You pay $22,500 for a 100g bullion and signed the 2 pages contract
  2. You get paid $382.50 monthly for the next 3 months ( 22,500 x 1.7% )
  3. 3 months later, 100g gold price goes up to $23,500.
  4. You paid an extra $1,000 and renew the contract
  5. You get paid $399.50 monthly for the next 3 months ( 23,500 x 1.7% )
  6. another 3 months later, 100g gold price goes down to $21,500.
  7. You get paid $2,000 and renew the contract
  8. You get paid $365.50 monthly for the next 3 months ( 21,500 x 1.7% )
  9. another 3 months later, 100g gold price goes back to $22,500.
  10. You paid $1,000 and renew the contract
  11. You get paid $382.50 monthly for the next 3 months ( 22,500 x 1.7% )
  12. when the contract ends, you sell it to TGG and get back $22,500

Month paid get back
1 $22,500 $383
2 $383
3 $383
4 $1,000 $400
5 $400
6 $400
7 -$2,000 $366
8 $366
9 $366
10 $1,000 $383
11 $383
12 $383
$4,590


Summary
Maximum Capital : $ 23,500
Total Return : $4,590
Rough Return : ~20%

All this happens while you are keeping your own bullion gold with you until you sell it back to TGG.

How does this sound to you ?  What could be the catch if any at all ?

What other strategies you may apply assuming this is a genuine deal ?