Investment Sight

The waiting game with a purpose

You may be required to wait for quite some time before you can liquidate your securities. In fact the maturity timescales of some securities are so long that the owners die before they come to the end of their process. This means that you have to plan ahead if you are going to buy a security.

For example if you are quite ill with a terminal disease then you should be aware that in all probability you will not be around to see the maturity of your security that you buy now. This could have implications for the way that you write your will. This is the kind of long term thinking that is essential for the securities market.

People buy securities for various reasons and for some it is quite desirable that the maturity period is as long as possible. Take the example of someone who buys a security as a means of creating a relatively safe inheritance for their descendants: the objectives of such a person demand that they look for the safest securities that can last for a long time.

They may even work out that the maturity date will not fall before the beneficiary is over the age of majority. If such a customer were to buy a short term securities issue by mistake then they would not be achieving the aims that they set out to achieve in the first place.

Other investors find that they have received quite large amounts of money in a relatively short space of time. They might want some temporary relief from the responsibilities of owning such large amounts of wealth. Therefore they might invest in short term shares as they work out a proper investment plan. If such an investor was to buy a long term share by mistake, it is quite possible that they would lose out on their original objectives. They could end up being tied up with a long investment that they did not want in the first place.

Getting a grip on your plans

Knowing what terms you want is the easy part. The difficult part is trying to select from amidst a wide variety of securities on offer. Remember that the linguistic styles of the lawyers are designed to confuse you. It will take a lot of patience and persistence for you to overcome this problem. You might even have to do some prior study in order to be competent when negotiating. However if you get the terms wrong then you will fail to deliver the things that you promised to yourself.

I will conclude this discussion by giving you an anecdote about someone who rushed into the securities market and ended up on the wrong end of the stick. This was a parent who wanted to leave an inheritance on the condition that she was dead. However she failed to select the correct terms and therefore the security was owned by her children. When she reached retirement she discovered that she had no legal claim to the security that she bought.