Bonds

saverjustice

I would steer clear of anything that sounds like a structured product which is linked to various indices. You should consider opening an online share dealing account with a firm which can put your purchased items within an ISA.

dunstonh

Forum_User wrote: »

If you can't, then don't! I still have the right to ask!

You have a right to ask but unless we can identify what you are talking about then anything said is pointless.

If you want help then give us the information to be able to help you.

saverjustice

dunstonh wrote: »

You have a right to ask but unless we can identify what you are talking about then anything said is pointless.

If you want help then give us the information to be able to help you.

Why so nasty?

dunstonh

saverjustice wrote: »

Why so nasty?

Thats not nasty.

However, if you look at the OPs responses on this and other threads, then its a good chance that its actually a troll and not someone after genuine help.

saverjustice

A Troll?

I take it that means a waste of space or something.

I will take your advice and ignore him/her.

le_loup

Forum_User wrote: »

If you can't, then don't! I still have the right to ask!

And we have the right to say f***-off and stop wasting our time.

Sceptic001

saverjustice wrote: »

Why so nasty?

On the contrary, dunstonh has been a model of politeness, seeking to identify what OP is asking and getting a series of garbage answers in response.

OP is arguing on another thread that inflation does not exist. Troll alert, perhaps?

Loughton_Monkey

Forum_User wrote: »

Anyway, just to clarify, what I am asking for, these are basically what I want. Please if anyone wants to advise, I would strongly appreciate:

Don't mind locking away as long as it serves to improve the rate I get
Don't mind variable/risky rates as long as there is some kind of guaranteed minimum that will mean some kind of growth is certain (often these products give a rate such as 0.5% guaranteed +variable growth). Educated risk is not out of the question
Can lock away up to 5 years but of course if rates are going to go up in the next few years this might not be best
Would prefer monthly/more regularly than yearly interest yield but not at massive rate reduction

Your constant reference to 'Rates' can only apply to savings. Investments do not normally use the word 'rate'. You invest money in something (like shares) and it might 'grow' or it might 'fall'. There is no such thing as a 'rate'. More to the point, I have never heard of anything called a 'risky' rate. The nearest thing I can think of is a Corporate/Government Bond. In this market, you may well be offered 5% on a specific bond, and then find one at 7% for the same term. The reason for the higher 'rate' would be that your capital is more at risk. You are more likely to lose it all than with the 5% bond. But you seem to want your captial guaranteed.

Maybe, to take a guess, you are thinking vaguely about some sort of "Structured Product" offered by banks. These used to offer 100% of capital, and some still do but many of them just guarantee up to 50% of it now. The remainder is placed in the most complicated and (undisclosed) set of 'derivatives' that could produce a profit. But equally might produce nothing. They are typifed by (a) very high sales and expense costs, and (b) backed by undisclosed complex derivatives (rather than 'real' assets. Which is why most of us would avoid them like the plague.

I never thought I would say this. But for you it could well be that if you go to a High Street Bank and ask about investments, you will get the product you deserve.

jamesd

Forum_User wrote: »

BONDS LINKED TO STOCKS AND SHARES, i.e. you take out a bond and the profit margin is linked to the stock market. They are frequently referred to as stocks and shares bonds.

No, they aren't, but you have written enough to give some clue about what you're thinking of: "guaranteed equity bonds". All three of the words used in the name are wrong in describing what the product really is: it's not really guaranteed, it's not really investing in equity and it's not a bond. It's a form of structured product.

GEBs are typically a poor deal, sold to people who don't know any better by high street banks.

The best option tends to be to put about 75% of the money in a term deposit account and 25% in a FTSE All Share Index tracker fund. That will deliver a 100% guarantee of the capital value, more upside if the FTSE goes up and less downside if it drops. While the money in the term deposit account is locked in, it also gets full FSCS protection against capital loss and unlike a GEB there is no counterparty (usually a big bank or insurance company, often another part of the bank selling the product) that can go bust and fail to pa out on the guarantee. The tracker fund can be sold at any time.

Hargreaves Lansdown is one easy place to buy a FTSE tracker fund from, look at the HSBC FTSE All Share Index Tracker fund. If you have stocks and shares allowance left, do it inside a S&S ISA. If you want to take the income use the Inc(ome) version, if you don't, use the acc(umulation) one.

Forum_User wrote: »

I don't mind having no access to it, but what I am looking for is what is likely to give me the highest growth yield.

Do you want growth or yield? The two are different things.

Growth: an increase in the capital value, potentially subject to capital gains tax (though it won't be with the amount you're thinking of unless you have other capital gains)
Yield: interest and often dividends, paid out and subject to income tax.

Yield is usually looked for by people who want to take it as income, growth by people who don't need that, or total return, the combination of the two, by people who just want the best combined result.

If you want more growth, increase the percentage in the FTSE tracker, accepting a lower than 100% guarantee of the capital value.

If you want some guaranteed growth, increase the percentage in the term deposit account, but it'll cost you more in reduced total return most of the time so it's not really a good thing to be doing.

Forum_User wrote: »

I don't mind if it has a risk element to it but would preferably like a guaranteed growth, and a decent one at that.

GEBs don't provide guaranteed growth. Their main selling point is reduced capital risk. Their main catches are that they ignore the dividends, which make up about 3.5% a year of the return of the FTSE and don't really have as much of a guarantee as the sellers imply. The provider keeps the dividends, if you buy a FTSE tracker fund, you get it.

If you want to invest the money somewhere to produce an income that is pair out to you there are options that can provide monthly, quarterly, twice a year or annual income payments. Depends what you're after. They tend not to be the ones that produce the highest total return but if your need is to take an income that's OK.

Reaper

It certainly does sound like you are talking about Guarenteed Equity Bonds, even if the products you are looking at do not call themselves that.

A product which offers risk free equity growth sounds too good to be true, and it is. If there were no downside everybody would use them.

This site lists many of the catches you can find on a typical scheme:
http://www.learnmoney.co.uk/advice/advice-05.html
And that's not even all the common catches, there are often others hidden away in the small print such as averaging out growth in the final year.