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Capital protection and growth in one investment ?

By Daniel Shillito - Topics: Inflation, Interest rates, Investment Risk, Investments, Italy, Milan, Uncategorised
This article is published on: 12th September 2016

Investing with confidence is something many of us find difficult to accomplish.

Bad news sells, and the economic environment and uncertainty we hear around us and in the media, can combine to make us risk-averse, unwilling to invest and shy of putting our savings into a new investment.

However without investment, without some risk, your wealth cannot grow, and is in fact more likely to go backwards, as inflation or the average prices of goods and services all around us, continues to rise. Example, your bank may pay you 0.5% per annum interest and inflation may be running at 1% per annum. You are losing 0.5% per annum!

It’s why many of us stay invested in cash or one or two properties. It’s why many banks direct you to investing in government bonds or BTP’s (Italian government treasury bonds). There is a belief or expectation that the risk is low, but a regular income can be gained and that there is some protection or guarantee that we won’t lose our money. We need to be aware that the price or value of BTP’s on the market often fluctuates, and there is no capital guarantee. These investments rely on government liquidity, the balancing of the government’s budget, and their commitments to honor that debt to us, the debt-holders.

What if you could invest in the market (funds and shares) and yet still have some capital protection to know your money would be safe and would be returned to you later?
One such investment type is a structured product. They consist of a capital-protected portion (of up to 100% protection) plus the opportunity to share the growth earned along the way with the provider of the investment, usually over a fixed time period.

Some such products can be complex, but there are now more products in the European market that are relatively simple to understand and use, and which provide some level of capital protection. They might also provide a better result than the usual cash-like capital protected products you find in Italy provided by some local insurance companies.

For more information about capital protection and a specific opportunity in such an investment today, contact me by email or by phone on the number below.

*Please note the above is not specific financial advice but prepared for information purposes. We recommend you obtain tailored financial advice by consulting with your financial adviser about what is appropriate for you and your own situation.

Article by Daniel Shillito

Daniel ShillitoIf you are based in the Milan area you can contact Daniel at: daniel.shillito@spectrum-ifa.com for more information. If you are based in another area within Europe, please complete the form below and we will put a local adviser in touch with you.

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