Investing in bonds

Bonds involve investors loaning their money to an organisation (i.e. 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.

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A beginner's guide to bonds

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.

How gilts work and why they matter

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.

How corporate bonds work

In his third video on bonds, Ed looks at how corporate bonds work, how risky they are, and whether or not they're a good investment for most people.


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.

But in mid-2012, yields bottomed, except in Japan where they've since followed suit. Economic growth is now reappearing, while inflation and state debt concerns are still present. A global bear market in bonds now looks a real possibility, led by US Treasuries. That would make borrowing more expensive everywhere.

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.


Bonds: the MoneyWeek view

January 2015: Too risky Government bonds remain overpriced and too risky for long-term investors. Corporate bonds are also expensive. The junk-bond bubble could soon meet a pin: the over-indebted energy sector. Leave well alone.

See our view on all the major asset classes here.


S&P cuts Russia's debt to junk rating

Credit ratings agency Standard & Poor’s dealt a blow to the Kremlin by downgrading Russian bonds.

Forget pensioner bonds – if Osborne really wanted to boost Britain, he’d do this

Pensioner bonds are a terrible idea, says Bengt Saelensminde – and morally wrong to boot. Here’s a much better idea for George Osborne to consider.

This ‘chart of the decade’ shows the best way to invest in 2015

The ‘chart of the decade’ shows one thing, says Bengt Saelensminde: more often than not, experts get it wrong. So here’s what to do about it.

Jeffrey Gundlach's peculiar predictions

Investment guru Jeffrey Gundlach has a novel take on where US Treasury yields are heading in 2015.

The assets to buy now - January 2015

Asset allocation is at least as important as individual share selection. So where should you be putting your money? Here’s January’s take on the major asset classes.

The mainstream press is missing the real point on German bonds

German bond yields may have turned negative. But the real news is that investors could get paid back in a totally different currency to the one they bought in.

Back gold miners and the Nasdaq – plus ten more predictions for 2015

Dominic Frisby dusts off his crystal ball and picks his top 12 investment predictions for 2015.

The 12 worst investments of 2014, #11: Russian corporate bonds

Yields on Russian corporate bonds soared this year as billions of dollars’ worth of capital left the country in the wake of sanctions by the EU and US.

Osborne digs deep with the new pensioner bonds

Merryn Somerset Webb explains why retirees should let the chancellor buy their affection with the new pensioner bonds.

This could be the start of subprime 2.0

Markets are tanking despite the collapsing price of oil. Bengt Saelensminde reveals what’s got shrewd investors running scared.

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