F.T.S.E. 100 on the slide?

Canny_mal

Thanks for all your replys

The reason I asked the question in the first place is 18 months ago I took out a 6 year FTSE linked ISA with 2 early release points.

The first of these release points comes at the end of year 3. Simply if the FTSE 100 has risen 21% from the level it was at on the 30 Apr 2004 (4489.70) I get my funds back + a 21% bonus on top.

If it hasn't increased by 21% at this time the investment continues on till the end of year 5 where there is a second, much higher percentage increse payout trigger.

I would like to think the investment will pay out at the 3 year mark. Recent performance had made me hopeful that this would be the case. However, this sharp drop we've seen in the last couple of days made me wonder whether the tide was turning.

Would anyone care to speculate whether they feel I'm likely to get my cash back at the end of year 3 based on the conditions outlined above?

carnet

Canny_mal wrote:

The first of these release points comes at the end of year 3. Simply if the FTSE 100 has risen 21% from the level it was at on the 30 Apr 2004 (4489.70) I get my funds back + a 21% bonus on top.

So what additional benefit is derived from this scheme that could not equally be achieved by simply buying, undoubtedly cheaper, a FTSE 100 tracker ?

Then you could have sold up whenever you chose .

Canny_mal

To be honest carnet I'm very new to these kind of investments.

What attracted me to this one was the fact it was low risk...you get all your original investment back after 6 years even if the FTSE has dropped and the 21% bonus at year 3 (or 55% at year 5) is completely free of tax.

I don't know enough about the stock market to start wheeling and dealing, hence the need for me to ask the original question at the start of this thread

deemy2004

Its October ! These things HAPPEN in October !

Its somethign to prepare yourself for in September

Look, were coming off 4 year highs, its going to correct.

I've just shoulved another couple of k into that BEE, and will likely buy the futures next week, the market was overbought technically, thus needed a correction to unwind it, whether its finished ? If I knew that i would already by long the futures

if your investing - small drops should not phase you at all, but rather be taken as an opportunities to add. The Oils, even if crude dips below 60 (which it looks like doing) is still at a healthy level for oil stocks so that sector looks appealing, as does the commodities and mining sectors.

Jeez louise, a 2.5% drop from the peak and already the weak bulls are running for the exit :rolleyes: ... just remember this - when it moves, its goign to be like a chu, chu train and it may not let you back in the door

Worry if the NEXT rally fails to break 5500 before dipping back below, say the 5380 region... then worry ! :eek:... This is NOT the time to worry !

Okay my forecast for the ftse is it will rally early the coming week, then the correction will continue probably taking the FTSE to below 5300 by late October, from then the uptrend 'should' resume into the new year.

JasonG_2

Canny_mal wrote:

To be honest carnet I'm very new to these kind of investments.

What attracted me to this one was the fact it was low risk...you get all your original investment back after 6 years even if the FTSE has dropped and the 21% bonus at year 3 (or 55% at year 5) is completely free of tax.

I don't know enough about the stock market to start wheeling and dealing, hence the need for me to ask the original question at the start of this thread

Sounds like the HSBC one? Yeah a FTSE tracker may be cheaper, and may get more return, but your capital is protected if you hold it for the term, big difference on yours. Persoanly a good vehicle to learn with, if it fits your needs and aims and lets you sleep at night.

I would just say remember its a 6 years vehicle, so just relax and take an interest. It sounds like you are taking more of an interest than most, which is good.

PS. Agree with the market gumpf most of it above, but BP said it felt the blow of hurricane Katrina more than it thought and said it would feel it in its profits, its a big part of the FSTE and had an effect.

dunstonh

Sounds like the HSBC one? Yeah a FTSE tracker may be cheaper, and may get more return, but your capital is protected if you hold it for the term, big difference on yours. Persoanly a good vehicle to learn with, if it fits your needs and aims and lets you sleep at night

The UK is the top performing sector every one to two years in a 15 year period. Putting money into a guaranteed equity bond that only invests in one sector and then doesnt pay you any dividends does not seem like a good idea.

Picking a selection of funds across the sectors and focussing on medium/high yields would be far superior. It also wouldn't be that risky either. If the dividends paid out 4% a year, then thats 24% (without compounding). Meaning the unit values of the investment could drop by 24% and still break even. A 6 year drop of 24% is inprobable.

GEBs are generally poor value for money for everyone other than the company issuing them.