As many regulars here know, I bang on a bit about risk management, because I think it's important.
Well today I got hit with an event that had slid completely through my risk management net - I'd never even considered it.
My margin lender rang this morning to tell me that the managed fund I use as security for my margin loan is no longer acceptable (its status has changed following risk review by the bank). As such, I have 10 days to find the balance of the loan in cash, lodge extra security to cover the loan or be sold down.
Ouch.
I've started the process of getting some $$ by increasing the loan against a property that has risen nicely in value, and should be ok to cover the loan, but it took some thinking and scrambling to make sure I'm ok. I'm fairly confident that I'll be able to pay our the loan and retain the fund units in full (which is what I want), but it's still a wake up call to be thorough in managing risk.
Well today I got hit with an event that had slid completely through my risk management net - I'd never even considered it.
My margin lender rang this morning to tell me that the managed fund I use as security for my margin loan is no longer acceptable (its status has changed following risk review by the bank). As such, I have 10 days to find the balance of the loan in cash, lodge extra security to cover the loan or be sold down.
Ouch.
I've started the process of getting some $$ by increasing the loan against a property that has risen nicely in value, and should be ok to cover the loan, but it took some thinking and scrambling to make sure I'm ok. I'm fairly confident that I'll be able to pay our the loan and retain the fund units in full (which is what I want), but it's still a wake up call to be thorough in managing risk.