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GMAC Smart Notes - What do you think
Old 09-30-2004, 07:57 PM   #1
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GMAC Smart Notes - What do you think

They look like bonds to me, who do you think? I'm going to start investing in I Bonds next year, does this look worth investing in?

http://www.gmacfs.com/notes/smart/main.htm
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Re: GMAC Smart Notes - What do you think
Old 10-01-2004, 04:11 AM   #2
 
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Re: GMAC Smart Notes - What do you think

Hello KB. They look like bonds to me also. And, risk-wise
I see them as practically zero. I would not be afraid to commit a huge chunk of my meager pile.

John Galt
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Re: GMAC Smart Notes - What do you think
Old 10-01-2004, 11:25 AM   #3
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Re: GMAC Smart Notes - What do you think

These are indeed bonds like any others. In this case you are lending to GMAC, which entails substantial credit risk. However, you do usually get paid pretty reasonable interest for the level of risk you take on with any gigantic borrower simply because it is often difficult for them to find sources of cash without upping their rates. Just don't buy too much from one issuer, and you'd be OK.
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Re: GMAC Smart Notes - What do you think
Old 10-01-2004, 12:36 PM   #4
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Re: GMAC Smart Notes - What do you think

Thanks for your responses. I'll keep the risk in mind.
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Re: GMAC Smart Notes - What do you think
Old 10-01-2004, 08:11 PM   #5
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Re: GMAC Smart Notes - What do you think

I purchased GM and GE internotes for my Mother, who is in a nursing home. Look over the survivor option carefully, but the advantage is that when Mom dies the survivor(s) can choose between keeping the note or redeaming for face value and acumulated interest. Redemption will result in a capital gain for the survivors, I think, but Mom receives a nice return while living. Details can be found on the Fidelity website.
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