View more on these topics

Take stock

The FTSE 100 index fell by over 200 points on July 26, its biggest fall in five years, and with the stockmarket highly volatile ever since, the cautious and the elderly should consider guaranteed equity bonds.

These are suitable for conservative investors as they are likely to be much more attractive than cash and they do protect investors’ capital.

They effectively provide investors with a stockmarket investment but with the comfort that they will not lose the capital.

Great care needs to be taken in choosing guaranteed equity bonds as, in some cases, outside an Isa, profits are taxed as income and some as capital gains.

The three products I like at the moment are the Skandia protected portfolio investment average return plan, Legal & General growth investment plan plus nine and the Barclays five-year protected FTSE plan issue S2.

All the gains on these are taxed as capital gains, with profits of up to 9,200 now available without paying capital gains tax.

They vary in terms from three to six years and are linked to the FTSE 100 index, except for Skandia which is linked to a portfolio of five individually managed funds.

The advantage of linking returns to portfolio funds rather than the FTSE 100 include active management, a spread of investment risk and the benefit of reinvested dividends.

The disadvantage of all these plans is that they must be held to maturity or the investors risk losing some of their capital. They are quite a good compromise for the investor who does not want to ride out the stockmarket.

World stockmarkets are likely to give investors a rough ride for some time but it is historically far more profitable over the longer term to remain in it rather than out of it.

Recommended

Sesame wants FSA to help small firms with compliance

Sesame believes small firms need more guidance about what the FSA requires as scrutiny of their compliance standards increases.The network and support service provider says many of its advisers are getting a growing number of mystery shopping visits.Sesame says the regulator is also increasingly deploying different ways to increase its reach such as sending emails, […]

SVM says bull market may not be over

SVM claims that the recent market volatility may not signal the end of the bull market, saying that the crisis so far is a question of liquidity not solvency.

Keydata boosts structured plan terms

Keydata has revamped its dynamic growth plan and the product now offers 12 times the return of the FTSE 100 capped at 72 per cent.The company says market volatility has made option pricing more favourable, meaning investors can achieve the 72 per cent return even if the FTSE 100 only moves up by 6 per […]

A switch in time

From my point of view, wraps are a necessity, both for me as an IFA and also as a consumer. Quite simply, they allow complete control.I have personally enjoyed excellent returns over the last few years with my own pensions run within a wrap.Once you have experienced what can be achieved by applying focus with […]

Guide

Guide: reporting to the Pensions Regulator — what and when?

Johnson Fleming has published a step-by-step guide demonstrating the importance of record keeping and reporting, and how it can ensure you operate a successful scheme. The guide takes you through some key questions you need to ask and identifies the information you need to obtain. The topics include: why you need to keep records and the benefits of doing this; registering your scheme; what information you need to record to ensure you meet the Pensions Regulator’s requirements; and what items need to be recorded and when.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment