Structured products advertised in the newspapers

I have studied many of the structured products that are advertised in the newspapers recently.

Here are my observations:

* many products have an element of speculation, ie you will get a higher return if certain events happen; for some products, you may suffer a large loss under other specified events

* the advertisements usually do not give the essential details; you have to ask for the prospectus or the brochure

* it is difficult to predict the likelihood of these events or to calculate the likely amount of the gain or loss (even for an expert like me)

* after paying the embedded charges and the marketing expenses, the products are likely to give a poor return to the investor

Lesson: Do not invest in these products; you are paying a high cost and not getting any real value.

If you wish to take risk, invest in equity directly. If you want a safe investment, buy government or highly rated corporate bonds.