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

March 2015: Avoid this ever-inflating bubble The bubble in bonds just gets bigger and bigger. Last week the yield on German five-year government paper turned negative. All the liquidity sloshing around has also pushed corporate debt – notably junk bonds – to eye-watering levels. Steer clear.

See our view on all the major asset classes here.


The big threat to bonds

Tighter rules governing banks’ bond holdings and debt-market activities could cause the next credit crunch.

Five of the best brokers for bonds in an Isa

If you’re investing in bonds – either directly or through bond funds – it makes sense to consider holding them in an Isa. Here are five of the best Isas for bonds.

When the bond bubble blows, it’ll take the stockmarket with it

The financial crisis in 2008 was a disaster caused by too much debt. But companies are borrowing more money now than they ever did back then. John Stepek looks at where it will all end.

A headwind for bonds

A sea change in the age structure of several major economies will have profound implications for markets.

The assets to buy now – March 2015

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

Where to find value in bonds

Bonds are expensive. But as professional investor Kevin Corrigan explains, you can find value by stepping away form the herd.

Stand aside – this bond bubble will blow

Investors are paying governments for the privilege of lending them money. That may make sense to some – but we won’t be following them, says John Stepek.

Five threats to your wealth

The threat of Greece leaving the eurozone has investors feeling jittery. But it’s far from the only big risk out there. John Stepek looks at the top five.

I don’t know when the bond bubble will burst – but it’ll hurt when it does

Investors are buying government bonds that are guaranteed money-losers. Are they mad? Or is something else going on? John Stepek investigates.

The assets to buy now – February 2015

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

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