A customer invested $40,000 in the vitamin account in 2005. She received a payout of 4% in the first year and no subsequent payout. Five years have passed. The deposit will mature in one year's time. if there is no further payout (which is likely), the total return is 4% for 6 years or 0.66% per year. This is a poor yield for an investor who locked up the money for 6 years.
In the past, many investors have received a poor yield on various tranches of capital guaranteed structured products. I usually advice investors to avoid structured products. The can get a better yield on government bonds or a low cost investment fund.
Learn bow to get a better yield. Attend the talk on financial planning held on 4 December. Register
here.
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