News/Events

Alternative Investments [7th August 08]

In this economic climate most investors are at a standstill with uncertainty on what the future will bring.

As I have previously mentioned; regrettably, most people are comfortable investing when markets are good - riding high, selling when they are bad - low. This is the reverse of what should be done! If you were happy to buy into, say, into the UK market with the FTSE at 6300, why shouldn’t you buy in with it at around 5200 as it is a discount of 18%?

With the UK and many global markets having fallen in value, reluctance to invest continues while many fear they could fall further. But it is extremely tricky, nigh impossible trying to determine the bottom of a market and when is the right time to buy.

Maybe the alternative is a structured product as there are many available at the moment which may be of interest to those able to invest for say 3 to 5 years or more that want some inbuilt guarantees, either to protect capital or provide a defined level of return.

For many, securing capital is the primary importance whilst stock markets are in decline. One plan offers 100% Capital Protection for an investment term of 6 years with the potential of growth. It provides 100% capital protection against falling markets but also geared growth potential of 109.5% of any growth in the FTSE 100 Index during the term of the investment so investors can benefit from any upturn.

This is attractive to those not prepared to lose capital but fear that moving out of equities runs the risk of missing out on some of the best returns when stock markets improve.

If you want to avoid Stock markets altogether and receive a defined level of income or return another plan is offering headline rates for three investment terms 5, 7 or 10 years for a gross (no tax deducted) annual income of 7.75%, 8.00% or 8.25% of your initial investment. You can receive monthly income, annual income or growth.

Although capital is not guaranteed; you may lose some of your initial investment, this plan may be attractive as returns are not linked to stock market indices and performance of either commercial property or equities. Underlying assets include a combination of cash and a portfolio of US Life Insurance Contracts.

This means that the income generated in the Plan is not affected by stock market volatility and is expected to remain stable throughout the investment term and provides additional asset diversification for investors whose portfolios focus on more traditional asset classes. The plan should deliver returns irrespective of what is happening to other financial markets or whether the economy is in recession or booming!

Structured Investments will usually have closing dates the Guaranteed Capital plan has a deadline for ISA transfers of 8 August 2008 and a deadline for ISA & Direct Investment of 29 August 2008. The Income plan featured in this article has a deadline for ISA transfers of 15 August 2008 and aDeadline for ISA & Direct Investment of 5 September 2008. It also offers an early investment bonus of 4% gross interest until 17 September 2008. 

You should review all financial arrangements regularly, speak to your IFA. Langtons is offering all readers free review without charge or obligation.

This article was written by Langtons - Published in the Western Morning News, Money, 7th August 2008