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Gray Green Investments

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Gray Green Investments. They are springing up like mushrooms: With investments in combined heat and power plants and solar systems, in wood plantations and wind parks, investors should achieve a dream return and at the same time be able to do something for the environment. But be careful: many offers are from the gray capital market.

Gray-green holdings

Investors can get involved in green projects in a wide variety of ways. With closed-end funds, money is collected for a specific investment object – such as a wind park, solar system or hydropower system. The fund is closed until the appropriate sum has been raised and the project will commence. By benefit sharing rights, investors will lend the operators a certain amount. One thing should still, though be kept in mind: in the vast majority of cases, these are entrepreneurial investments. With all the opportunities, but also with all the risks. In the worst case, the project fails and all of the money invested is lost (risk of total loss). Under no circumstances should investors assume that green investments are always particularly safe.

The general rules also apply to green investments

Before investors even think about such an investment, they have to make their investment goals and wishes clear and then look for the right product. For example, if security is the top priority, all that remains is to invest in deposit-protected savings products. However, you have to do without high returns. Closed funds or other investments in the gray-green capital market are out of the question in this case. The good news: There are also less risky investment products through to very safe savings products in climate-friendly and ethical-ecological variants.  

WATCH OUT, TRAP!

Caution is always advised when;

  • a provider reports unsolicited, for example by phone or internet or through friends.
  • a provider promises returns that are well above the market. The return on ten-year government bonds is recommended as a guideline for safe investments.
  • the product is sold as a tax-saving model without the provider knowing the income situation.
  • the provider tries to put the interested party under time pressure in order to conclude a contract quickly.
  • the provider does not even ask about the investment goals and wishes, but rather deals directly with the product.

IMPORTANT! One of the popular tricks of dubious companies is to initially close small deals successfully in order to lull the customer into security. The resulting trust is then mercilessly exploited: Every further investment leads to losses.

What is the gray capital market?

The “gray capital market” is understood to mean the investment market that is only moderately controlled by legal regulations and authorities. It is only supervised by the trade offices and not by the Federal Financial Supervisory Authority. Investors of all kinds try to find money that flows into projects that are often not even described in detail and which are supposed to generate high returns.

In the case of investment products that are sold by banks, such as savings contracts or securities investments, clear rules apply: Here there is supervision by the authorities. There are also numerous legal requirements and economic requirements that providers have to meet if they want to get into the banking business.

Investors in good faith who invest in closed-end funds and participations in the hope of supplementary retirement provision and tax advantages lose tens of millions of dollars every year. Most of the contracts concluded in the domestic sector are often completely financed by loans.

Justification of the “financial advisors”: the interest could be deducted for tax purposes and the income from the allegedly lucrative investment offset the loan installment, so that capital formation would take place at virtually zero rate. It is kept secret that large shares of the participation sums flow into the pockets of the initiators and brokers. Hence, profits for consumers are often unrealistic in the first place. A large number of investment companies and funds have paid little or no distributions in the past.

Where will the money be invested?

Many investment companies leave their clients in the dark about how the funds will be used. Investments should only be considered if it is clearly and unambiguously described in which properties how much is invested. Are the objects called by name? If the investment objects remain unnamed, it is a so-called “blind pool”. Those who take part in a “blind pool” have absolutely no idea what is happening to their money. He is at the mercy of the company’s management, for he invests “blindly”.

Hello, I have been working as an investment consultant and author for more than 20 years. I love what I do and I have enriched everyone around me. A lot of money is not important, the main thing is how you use the money.

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