What would induce you to take a risk?

How much inducement do you need to put your capital at risk? A lot or a little? I think I know the answer.

Share traders seemingly need a 75 per cent discount. According to the latest figures from stockbroker TD Direct Investing, Thomas Cook hit the top of its “most traded” list last week, after news of a second debt renegotiation inside a month sent shares in the struggling tour operator down from 43p to 10p in a single session. Trading volumes were up 160 per cent week-on-week. However, closer inspection reveals this was not high-conviction contrarianism, nor concerted bargain hunting – the buy: sell ratio was not much higher than 1:1. Indeed, there are still as many capital preservers as risk takers: the top 10 buys and sells at TD comprised exactly the same stocks, just in a slightly different order.

Fund investors clearly need more than a 28 per cent capital gains tax (CGT) saving. Net sales of funds through tax-efficient individual savings accounts (Isas) were a paltry £15m in October, the Investment Management Association (IMA) has revealed, compared with a monthly average of £164m over the previous 12 months. Not even the IMA’s commendable decision to scrap the “Cautious Managed” sector name, and harmonise it with the Association of British Insurers’ clearer label of “Mixed Investment: 20-60 per cent equities” is likely to lure investors from the sidelines.

They tend not to invest when they can’t see consistent returns – and, if a new online database called InvestorBee (www.InvestorBee.com) is to be believed, there are few on show. InvestorBee claims to have data on the returns from more than 30,000 financial products held by a million UK investors. From this, it posits the seemingly impossible statistic that only 1 in 2,000 investors consistently outperforms the average each quarter. Improbable probabilities notwithstanding, fund consistency remains a barrier to risking capital. Whenever a fund manager tries to wow me with top-quartile performance, I still cite Thames River’s consistency survey showing that only 16 of 1,188 funds have managed this for three years in a row.

Bond investors, however, only seem to need a little over 4 per cent. You might think that they would want more – to at least ensure their capital will avoid the ravages of inflation. If so, you might also be surprised to find that 4.3 per cent is all you’re likely to get from a bond linked to the retail prices index (RPI), assuming inflation recedes as quickly as the latest forecasts suggest. If you take the Treasury’s consensus figures for future RPI rises, and the Office for Budget Responsibility’s estimate for the gap between RPI and consumer prices, give them to some clever bond analysts at Evolution Securities and wait a few minutes, you discover that this is all that Tesco Bank’s new inflation-linked bond will yield, if bought at issue and held to maturity. Admittedly, 4.3 per cent is more than the yield you get for buying an index-linked gilt. But these are corporate bonds, remember, so your capital is at risk if the issuer gets into difficulty (although, after this week’s autumn statement, much the same may be said of gilts).

Nonetheless, I fully expect Tesco Bank’s RPI-linked bond to fly off the shelves, as investors overlook the fact that it’s not issued by the supermarket, but by its retail banking subsidiary.

Every little helps, so we are told, but this seems very little to me – and sits in the “value” range of corporate fundraising.

Venture capital investors must need more incentive to take the ultimate risk on a start-up company ... so, er, how does 78 per cent tax relief sound?

This appears to have been the calculation carried out by clever officials at the Treasury in recent weeks, when deciding the tax treatment of the new “Seed” enterprise investment scheme (SEIS).

It’s the combined effect of 50 per cent upfront income tax relief (ie a £1 investment costs you 50p) and being allowed to avoid 28 per cent CGT by reinvesting taxable gains (ie a £1 investment costs you 22p of previously taxable profits). Where do you sign up and hand over your capital? Therein lies the problem. With limits of £100,000 per investor, and £150,000 per investee company, very few clever analysts are going to want to do the due diligence on an SEIS. If a conventional EIS can attract investments of £1m per investor from next April, they’ll just keep promoting those.

If you can’t get a 78 per cent “discount”, then, what can you do? Now, this might sound controversial, but what about ... a pension? Upfront income tax relief of 20, 40 or 50 per cent on investments of up to £50,000 a year – or £150,000 if you carry forward unused allowances. Tax-free gains, too. Arguably, these gains are also about to get better. With £20bn to be diverted into infrastructure projects – which typically yield about 6 per cent – pensions arguably offer more inducement than ever.

matthew.vincent@ft.com