Bonds involve investors loaning their money to an organisation (ie a government or a company), and receiving fixed interest payments over a set amount of time. They are traditionally seen as a safe investment, and a key part of a diversified portfolio.
Bonds have always been a popular investment for British investors, for while their value can fluctuate according to factors such as interest rates and inflation, they provide investors with a regular income.
At MoneyWeek, we'll keep you up to date with what's going on in the bond markets – and whether or not it's a good time to buy them.
It's easy to become confused about bonds – the term covers a wide range of financial products. Here, Ed Bowsher explains the main types of bond.
In this video, Ed takes a look at UK government bonds – how they work, why they are important, and whether you should invest in them.
MoneyWeek bond watch
Government bond yields around the world started climbing again in Autumn 2010. This showed investors getting more jittery about a toxic mix of soaring state borrowings and rising inflation, and so demanding bigger returns as compensation.
Global ten-year sovereign bond yields
America's ten-year bond yield is arguably the world's most important market indicator: it sets the cost of global long-term borrowing. As with other government bond yields, it falls (prices rise) when economic growth and inflation decline, because the fixed income stream paid by sovereign debt becomes more valuable. Quantitative easing (central bank bond-buying) has lowered yields further.
Eurozone ten-year sovereign bond yields
On the edge of the eurozone, rising default fears have been sending peripheral countries' sovereign debt yields soaring. The rough line in the sand so far is 7% - when yields breach that, it looks like the point of no return.
How will this play out? Watch this page to keep a close eye on those yields – they're a great early warning indicator of trouble ahead.
Spanish and Italian three-year sovereign bond yields
Here's the chart of Spanish and Italian three-year bonds. As investors' fears about these countries' finances grew, yields spiked up sharply.
Investors need not worry about who is or isn’t in charge of eurozone governments, says Matthew Lynn. As far as the markets are concerned, it makes no difference.
Enhanced income funds can earn investors higher income without taking on added risk. Sarah Moore explains how they work.
Twickenham rugby club Harlequins is to become the latest sports club to tap its supporters for cash when it issues a 5.5% mini-bond. But is it worth buying in?
There are two main risks when buying a bond. Matthew Partridge explains what they are, and how “duration” can help tell you if it’s a risky bet.
Ireland has issued a 100-year bond priced to yield 2.35%. But as this chart of British gilt yields over three centuries suggests, buying it might not be a terribly good idea.
In the past decade, 17 African countries have issued a dollar-denominated bond. But now the “bond bonanza” is subsiding, and Africa isn’t looking quite so creditworthy.
Asset allocation is at least as important as individual share selection. So where should you be putting your money? Here’s our monthly take on the major asset classes.
Expect the Bank of Japan to cut interest rates again and increase its monthly government bond purchases.
In the latest of our beginner’s guides to investing, Merryn Somerset Webb explains the basics of bonds.
With the war on deflation in full swing, the threat of inflation making a return is real. John Stepek explains the one asset to avoid – and one to buy.