[quote=patientrenter][quote=NeetaT] There is nothing wrong with this investment. It is a user friendly form of hard-money lending. They lend at 15%-20% to people who have collateral worth 125% of the loan and pay the investor 12%. I did this for one year with a firm located in the US. It was scary at first, but it turned out well. Maybe I was playing roulette and didn’t know it.
[/quote]

NeetaT, you scare me. You are risk-averse, but do things like this. It seems you are only comfortable taking high levels of risk when:

1. The promised rewards are high – high enough that common sense tells us there has to be high risk

2. The actual risks are concealed from you

I sure hope you don’t end up losing most of your money one day.[/quote]

The trick here is use of the Certificate of Deposit moniker for the security because people will automatically view it as an alternative to a US CD. While it is technically a CD, it’s really just a short-term investment in the junkiest of foreign junk bonds. Sure, you might actually get paid back – I don’t think this company is a scam or pyramid scheme in the traditional sense. But the borrowers they are funding are extremely high risk and there’s probably a very small margin of error in the portfolio. The important thing is not to think of this as a CD, but rather an equity-like debt instrument in a developing country, with a return that may or may not reflect its true risk. Personally, I wouldn’t touch this thing with a ten foot pole.