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Guaranteed Bonds - a good idea?
polybear
Posts: 398 Forumite
Hi,
I currently have a mix of investments at the moment.
I've seen Guaranteed Bonds advertised, where the sum of money is invested for a specific period of time (e.g. 3 or 5 years) and the return you get is a percentage of growth in the FTSE (e.g. 65%). However, if the FTSE falls over the period then you are still guaranteed to get your original investment back.
Are these a good idea please - any thoughts? Any recommendations on best deals at the moment, and anything to watch out for? Thanks.
polybear
I currently have a mix of investments at the moment.
I've seen Guaranteed Bonds advertised, where the sum of money is invested for a specific period of time (e.g. 3 or 5 years) and the return you get is a percentage of growth in the FTSE (e.g. 65%). However, if the FTSE falls over the period then you are still guaranteed to get your original investment back.
Are these a good idea please - any thoughts? Any recommendations on best deals at the moment, and anything to watch out for? Thanks.
polybear
0
Comments
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if these are GEBs (guaranteed equity bonds) you are mentioning, then i would not touch them with a barge pole. they've had a bad press over the last couple of years - and rightly so. you're guaranteed your initial investment if things go belly up, but that simply is not true in many cases.BLOODBATH IN THE EVENING THEN? :shocked: OR PERHAPS THE AFTERNOON? OR THE MORNING? OH, FORGET THIS MALARKEY!
THE KILLERS :cool:
THE PUNISHER :dance: MATURE CHEDDAR ADDICT:cool:0 -
Avoid like the plague.
The Telegraph explains why.
"Firstly and most crucially, dividend income does not come into the equation when calculating the stock market return with Gebs. The total return from the FTSE100 was around 40 per cent between mid-February 2002 and mid-August 2007 because dividends were reinvested; with dividends stripped out it is nearer 16 per cent."In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Has the Telegraph been reading our posts.
Do a search on this section for guaranteed equity bonds and you will see a number of responses why we think they are so poor.
I havent seen a good one since the mid 90s (last time I did one) so I am no fan.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Has the Telegraph been reading our posts?
LOL!
Interestingly I have seen quite a few mentions in both the Times & Telegraph of various articles on MSE. Considering Martins growing public profile together with the volume of traffic on this site (making it crawl at times), I guess it is inevitable.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
...and Martin's appearances on The Wright Stuff each wednesday
BLOODBATH IN THE EVENING THEN? :shocked: OR PERHAPS THE AFTERNOON? OR THE MORNING? OH, FORGET THIS MALARKEY!
THE KILLERS :cool:
THE PUNISHER :dance: MATURE CHEDDAR ADDICT:cool:0 -
i have never been a fan of guaranteed investment bonds - never invested in one, never sold one. the only guarantee with these type of products is that the provider will win every time - that is the way they are designed.
as warren buffet and edinvestor says - keep it simple. a portfolio with the correct asset allocation should not cause any surprises and can provide the guarantees that cautious investors are looking for.
some of the protected products out there start switching to cash as the market is falling therefore limiting losses. now if someone could invent a product where the manager starts switching into cash just before the market starts falling i would be interested."The Holy Writ of Gloucester Rugby Club demands: first, that the forwards shall win the ball; second, that the forwards shall keep the ball; and third, the backs shall buy the beer." - Doug Ibbotson0 -
Didn't Martin Lewis use to recommend the NS&I GEB?
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He did but havent seen anyone refer to that article for a long time. I dont know if it was pulled and we persuaded him otherwise.
My suggestion for those considering GEBs is on the following thread:
http://forums.moneysavingexpert.com/showthread.html?p=2728519#post2728519I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Many thanks for all the replies. Me thinks I'll give GEB's a miss!
polybear0 -
Many thanks for all the replies. Me thinks I'll give GEB's a miss!
polybear
I was considering a GEB until I read a reply by Dunstonh and once the truth got through my thick skull I too realised that giving them a wide berth is the only sane thing to do.Gordon Brown ate my hamster0
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