With investors still smarting after the duffing they have taken over the past five years, it is little wonder that demand for guaranteed investments is at a healthy high.
Companies such as MetLife, Santander, Aviva and others offer a good range of investments with guarantees, geared to appeal to those prepared to pay for the knowledge that their capital cannot be lost. Guaranteed investments come with a promise that, if you are happy to hand over your lolly for an agreed term – typically 5 years – there will be no downside, and your full capital sum will be returned to you, as an absolute minimum.
Depleted by inflation, of course, but not in danger of dwindling to half its original value if the FTSE decides to nosedive again as it did in 2007.
There are even guaranteed investment funds now (GIFs) that combine a punt in the stock markets with an insurance guarantee that your pot cannot fall below a certain level, usually set at the amount you pay in. At 1% a year for the guarantee, GIFs are a lot to pay for a good night’s sleep - but the best of them will actually allow you to reset your guarantee half way along, so that you can define a new, higher minimum to cover the interim growth in your guaranteed investments.
As the American tourist said, when she saw the sundial in the gardens of Hampton Court Palace: “What will they think of next?”
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