Depending on the angle of view, such a thing as 'guarantee'
may or may not exist.
Most simplistically put, yes i'll agree there's (ultimately)
no such thing as a guarantee since especially who can
be 100 % sure the sun would rise tomorrow ??
However, when put in some practically packaged
setting, there CAN be such thing as a guarantee.
Of course such guarantees would be subject to
various conditions being met for it to be honoured.
So say if i've enough reserve funds to take on
someone's investment of say $ 100 + payable
bank interest of 3 % p.a. etc., then i can offer him
even a 100 % guarantee against any lost of that
principle + interest !! No problem of honouring such
a guarantee because my reserve fund is more than
enough to cover it ! But from my own practical experiences
i know i won't need to execute such a guarantee since
my choice of investments tend to deliver my stated
returns instead !
BTW, you put money in bank the bank don't just
leave the money there ! They use it in many clever
ways to generate tons of profits for themselves & only
bother to you back chickenfeed interest in return !!!!
The banks 'absorb' practically all the risks such that
the depositor appears then to have 'no risk' by
placing their money there. But broadly speaking, i'll
say the idea behind is like my guarantees mentioned
above i.e. using one's reserves to cancel out any
possibility of losses such that the guarantees offered
can still be honoured !
Originally posted by ndmmxiaomayi:
Safest way is to put in bank.
Riskiest way is to char money --> play stocks
In the middle, can buy unit trusts or blue chips.
But if you lose money, not my business. There's no such thing as guarantee.