A landbanking firm claims that they have never lost money for their clients. They claim that their accounts have been vetted by a renowned auditing firm and they have very strict criteria in selecting their projects. Sounds to be the perfect investment! But let’s cool down and think through the possible issues.

No one likes to lose money. Certainly having the record of no losing client’s money is great. But are there possible ‘costs’ to this? According to the article, some investors have to hold on to the investment for as long as 19 years! Of course, not all projects are that long. The reported average holding period is 7 years. However, the liquidity profile is not stated in the article. Investors might have difficulty liquidating before project is complete.

Furthermore, currency is not stated. Not losing money in USD/CAD does not mean not losing money in SGD. Capital gains ...