Question
Do you stil hold the same view on the Mozambiqe Moringa Tree invesment as you held in august 10, i.e. Very High Risk and not to be touched ??
Answer
(this question refers to my article here).
There are really two things to consider for this type of investment:
- Will a chosen project likely deliver expected returns?
- If something goes wrong what, if any, investor protection will you have?
The first is very difficult to answer. Based on the limited amount of financial information published by the companies promoting Moringa investments I'm sceptical. Even if we assume the projections are fair and the project is 100% legitimate, other unpredictable factors such as climate or politics may affect returns. And, of course, we are assuming that there is sufficient long term demand for Moringa Seeds to ensure a profit.
The latter is far easier to answer, you'll likely have little protection as these investments are not authorised or regulated by the Financial Services Authority (or by any other overseas government bodies as far as I can see). Personally, I wouldn't make a land based investment I'll never practically be able to visit, especially if it's not covered by robust government backed regulation and investor compensation. Yes, these companies might have various legal agreements, fidelity insurance and escrow accounts etc but, bottom line, if there's a problem you may have to endure the hassle and expense of taking them to court to enforce any of these. Far better to be covered by a government backed investor compensation scheme (e.g. the UK Financial Services Compensation Scheme (FSCS)).
The track record for African based investments marketed to UK investors is also less than convincing: The Cru Africa Invest fund (which largely invested in agriculture in Malawi) and New Star Heart of Africa fund (which invested in more mainstream African stock markets) both failed miserably in recent years.
Maybe I am missing the investment of a lifetime, but I'll nevertheless sleep far more peacefully than if I did invest some of my hard earned cash in an African Moringa tree project. You only have to cast your mind back to ostrich farming or Dubai property to see how 'amazing' (unregulated) investments can quickly turn sour...
Do you stil hold the same view on the Mozambiqe Moringa Tree invesment as you held in august 10, i.e. Very High Risk and not to be touched ??
Answer
(this question refers to my article here).
There are really two things to consider for this type of investment:
- Will a chosen project likely deliver expected returns?
- If something goes wrong what, if any, investor protection will you have?
The first is very difficult to answer. Based on the limited amount of financial information published by the companies promoting Moringa investments I'm sceptical. Even if we assume the projections are fair and the project is 100% legitimate, other unpredictable factors such as climate or politics may affect returns. And, of course, we are assuming that there is sufficient long term demand for Moringa Seeds to ensure a profit.
The latter is far easier to answer, you'll likely have little protection as these investments are not authorised or regulated by the Financial Services Authority (or by any other overseas government bodies as far as I can see). Personally, I wouldn't make a land based investment I'll never practically be able to visit, especially if it's not covered by robust government backed regulation and investor compensation. Yes, these companies might have various legal agreements, fidelity insurance and escrow accounts etc but, bottom line, if there's a problem you may have to endure the hassle and expense of taking them to court to enforce any of these. Far better to be covered by a government backed investor compensation scheme (e.g. the UK Financial Services Compensation Scheme (FSCS)).
The track record for African based investments marketed to UK investors is also less than convincing: The Cru Africa Invest fund (which largely invested in agriculture in Malawi) and New Star Heart of Africa fund (which invested in more mainstream African stock markets) both failed miserably in recent years.
Maybe I am missing the investment of a lifetime, but I'll nevertheless sleep far more peacefully than if I did invest some of my hard earned cash in an African Moringa tree project. You only have to cast your mind back to ostrich farming or Dubai property to see how 'amazing' (unregulated) investments can quickly turn sour...
Read this Q and A at http://www.candidmoney.com/questions/question460.aspx
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