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Julian Gibbs

Yesterday I bought some trousers at half-price. There were hundreds of people in the store, all looking

for bargains. The problem is that investors do the opposite – they buy when the market is high and sell when it is low.

Now is an excellent time to buy Dublin-based high-income or growth plans with a low downside risk. The Income Option Plan from GE Life is an excellent one. It offers 10 per cent a year fixed income or 33 per cent growth over three years and two months. The capital is paid back in full provided the Euro Stoxx 50 index does not fall by more than 20 per cent during the investment term or falls by more but recovers to or above its initial level.

GE Life also offers an 8 per cent a year income version (or 27 per cent growth) where the protection level increases from 20 to 30 per cent. Furthermore, in both cases, any falls during the first year are not taken into account. In other words, only the levels of the index in the last two years and two months are relevant.

This is an important option and is recognised by independent analyst Future Value Consultants which rates it 8.5 out of 10 for higher-rate taxpayers and eight out of 10 for basic-rate taxpayers.

My preference is for the 10 per cent option as the Euro Stoxx 50 index is more than 40 per cent off its high at the time of writing and so is very unlikely to fall by a further 20 per cent – certainly in the second and subsequent years, unless there is a major catastrophe in the world, such as an economic collapse.

At current levels, these Dublin-based plans are an absolute bargain and the risk is very little indeed. Another class of investor which should take more interest in these plans are pension fund trustees, for whom the returns are tax-free.

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