Financial institutions have been responding to investor demand and their need to sell with the introduction of a spate of guaranteed products in recent months. When equity markets are falling or very volatile, investors want products that offer them capital security.

Pure equity products sell best when equity markets are high, as new investors pile in to make the profits they have seen their friends make. But many investors - late Nasdaq entrants can testify - buy in when the market is at or near its high, and when the fall comes they loose out heavily.

Products with capital guarantees protect all or most of the investors original capital. But investors have to pay for this security by foregoing much of the growth in the markets where their funds are invested. And because they usually buy these products when markets are low, they lose out when the inevitable rally follows.

Some of these products may suit cautious or nervous investors but, for braver investors, the time to get into pure equity products should be when markets are low so that they will get the full benefit of the rebound.