Growth investment or GEB?

Deemy

exil wrote:

Well, if I had put my money into GEB instead of ISAs I'd actually be a lot better off now - since I happened to buy my ISAs just when the market started to head south in 2000.

It all depends on your priorities. If the guarantee of getting your money back is
important to you, then why not GEB?

And I'm not a Post Office salesman! And I'm not recommending GEBs either. Just the fact that other funds have done better is not necessarily a reason for rejecting them, if the guarantee is important to you personally.

There wern't any GEBs in 2000

None that I can locate

cheerfulcat

exil wrote:

Well, if I had put my money into GEB instead of ISAs I'd actually be a lot better off now - since I happened to buy my ISAs just when the market started to head south in 2000.

But had you continued to put money into the stock market over the intervening years you would have done far better than with a GEB which has returned over that time precisely nothing.

It all depends on your priorities. If the guarantee of getting your money back is
important to you, then why not GEB?

And I'm not a Post Office salesman! And I'm not recommending GEBs either. Just the fact that other funds have done better is not necessarily a reason for rejecting them, if the guarantee is important to you personally.

The " guarantee " of a return of the initial investment gives a false impression of security. Inflation will have eroded the value of the capital by a good 15% over 5 years at current rates. And GEBs are not funds - they have absolutely no stock market exposure except insofar as the providers use derivatives in securing the return. They are deposit accounts with the rate of interest decided by the average level of the relevant index over the last 6 or 12 months of the term. They are truly stinky products. Really.

Deemy wrote:

There wern't any GEBs in 2000

There were scores of them. They were very popular right before the market went bang...

Deemy

cheerfulcat wrote:

There were scores of them. They were very popular right before the market went bang...

The ones I remember all allowed for a capital loss, and hence why so many people had problems with loss of capita after the market popped.

cheerfulcat

No, there were loads of " risk free " " bonds ". Guaranteed Stock Market Bonds they were called then. You're thinking of precipice " bonds ", perhaps, some of which had a guarantee down to a certain level and then dropped, sometimes by 2 points for one point on the market.

All of which underlines the fact that there is no such thing as a free lunch.