THE FINANCE GHOST: Why investors get last bite at the cherry

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If a company gets into trouble with debt as is now highly likely given rampant interest rates, you, the shareholder, are last in line for any returns, writes FinanceGhost.

Another monetary policy committee meeting, another interest rate hike. The prime rate is now 11.75%, more than the average return delivered by the JSE over the past five years even on a total return basis .

Before you fetch the pitchforks and torches, I’m well aware that I just took a spot interest rate and compared it with an average return in a different asset class over a period of time. I’m not for a second suggesting that the average return over the past five years would’ve been better in a notice deposit than on the JSE, as interest rates weren’t high enough over the period in question...

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THE FINANCE GHOST: Why investors get last bite at the cherryIf a company gets into trouble with debt as is now highly likely given rampant interest rates, you, the shareholder, are last in line for any returns
Source: FinancialMail - 🏆 20. / 63 Read more »