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10 Warning Signs
you may have a Problem with your stockbroker, financial planner or investment advisor.
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You lose more money than you thought you were risking.
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Investment losses negatively impact your retirement or or lifestyle
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Your broker won't return your calls
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Your broker is good at telling you what to buy, but not what to sell
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You are losing money in an IRA or retirement account
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Your broker has more excuses than ideas
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Your broker suggests an annuity for your IRA account
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"Risk" is never part of the conversation
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Your broker says it's "safe", but your gut says differently
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Your "investment professional" loses a lifetime of your savings
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The Risk of Reverse Convertible Notes
Were you sold Reverse Convertible Notes?
These financial instruments are far more risky than the firms that
manufacture and then sell them to the public make them out to be. Unlike
a convertible bond, where you receive a steady income stream and some
potential for appreciation if the underlying common stock goes up in price,
a Reverse Convertible Note is something altogether different.
In truth, the name alone suggests something that it is not. Specifically,
most often these "notes" are not even notes of the corporation their value
is tied to, but rather are obligations of the underwriter that sold them to
you.
The issuer of a reverse convertible note is banking on the underlying
stock collapsing in price! The more the price goes down the more money
the underwriter/issuer makes. At some point they will "swap" your note for
shares of stock, worth far less than the principal value of the note. That
is why the interest rate you receive, sometimes upward of 18% is the
enticement to get you to buy. Think about it for a moment. Why would an
institution with a AA or even AAA rating have to pay 18% or even 10% to
borrow money? They don't. It's only because they want you to buy their
reverse convertible note because they believe the underlying stock will go
down.
In reality, when you purchase a reverse convertible note, you are making
a bet against the "house". If the stock goes down, you lose, sometimes big.
These securities are only appropriate for the most sophisticated and
speculative of investors.
They can almost never be considered appropriate for individuals that
wish to take below average, average or even above average risks with
their investment dollars. Under no circumstances can they ever be considered
appropriate for retirees or other income oriented investors. Don't
let their high yields entice you.
If it is too late, call us and let us help determine whether or not we
can recover your investment losses due to inappropriate reverse convertible
notes.
FOR ADDITIONAL INFORMATION ABOUT OUR SERVICES OR
FOR A NO OBLIGATION CONSULTATION
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Investors Recovery Service is not a law firm -
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