Listen to a Business English Dialogue About Guaranteed stock
Anthony: Mia, have you heard of guaranteed stock?
Mia: No, what’s that?
Anthony: Guaranteed stock is a type of stock that comes with a guarantee from the issuing company that the stock will maintain or increase in value over a certain period, providing investors with a level of assurance about their investment.
Mia: That sounds reassuring. How does the guarantee work?
Anthony: The guarantee typically involves the issuing company promising to buy back the stock at a predetermined price if it fails to meet certain performance criteria or if the market value falls below a specified level.
Mia: Are guaranteed stocks common investments?
Anthony: Guaranteed stocks are less common than traditional stocks, as they’re typically offered by specific companies or financial institutions as a way to attract investors who prioritize capital preservation and downside protection.
Mia: How do guaranteed stocks differ from regular stocks?
Anthony: Regular stocks don’t come with any guarantees of performance or protection of the investor’s capital, so their value can fluctuate based on market conditions and company performance.
Mia: Can investors lose money with guaranteed stocks?
Anthony: While guaranteed stocks offer a level of protection against losses, there’s still a risk that the issuing company may not fulfill its guarantee, or that the stock may underperform compared to other investment options.
Mia: How do investors assess the potential returns of guaranteed stocks?
Anthony: Investors should consider factors like the terms of the guarantee, the reputation and financial stability of the issuing company, and the opportunity cost of investing in guaranteed stocks versus other investments with higher potential returns.
Mia: Thanks for explaining, Anthony. Guaranteed stocks seem like an interesting option for investors looking for capital protection with some potential for growth.