in an article with the same title, it was reported that investors who had bought products issued by zhongding wealth management centre rushed to huaxia's shanghai branch yesterday, after weekend reports online that the products had stopped making payments which reuters could not confirm on the payment status of the products.
the bank said it was "aware" of reports that the investments could not be repaid when the products matured but huaxin did not confirm those reports.
in the last few years, sales in china of so-called wealth management products (some with terms as short as a few weeks) have soared (which grew to 12.14 trillion yuan in the first half of 2012) as banks compete for deposits with products offering higher interest rates than those offered on savings accounts. huaxia bank was one of the 5 most active issuers cited in the july report by consultancy cn benefit.
my comments:
the question to ask is; are there really investments in the financial jungle which promises quick and higher returns? but of course, there are if u base the answer to the question on the many ads in our dailies, the internet and even the social media, promising quick and big returns.
my take is there will always be products that are dangled offering quick and higher returns as compared to say, plain vanilla bank deposits.
but the more significant point is, does the higher returns come with lower risks and more importantly, are the higher returns fully guaranteed?
and that is the $64 million dollar question.
but do always keep in mind the cardinal principle that the higher the risks, the higher the potential returns but these are usually always never guaranteed.
which leads us to the other principle which is 'caveat emptor' and heeding this warning may perhaps be the hindsight which everyone will surely appreciate rather than be sorry afterwards.
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