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That's actually a fascinating error that people make with fixed-income investing; too much focus on safety of principal vs. actual compounded yield and recovery
by NovemberWhiskey 4y ago
That's actually a fascinating error that people make with fixed-income investing; too much focus on safety of principal vs. actual compounded yield and recovery rate in the case of default.
- infinite8s 4y agoCan you say more on that error?
- liamYC 4y agoIn New Zealand, most fund platforms have a custodian - an entity that holds the assets you buy on the platform. If the platform busts, you’re safe because your assets are held with the custodian and not the platform. But that then begs the question, what happens if the custodian goes bust? Well custodians also have a custodian, diversifying the risk one step further (but not completely). Custodian inception! Further on this here: https://moneykingnz.com/what-happens-to-your-money-if-investnow-or-sharesies-go-bust/ https://moneykingnz.com/what-happens-to-your-money-if-invest...