Bonds

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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

April 2014: Two big problems There are two big problems with bonds. One: they're too expensive. Government bonds have seen a 30-year bull run and corporate debt has been pushed up to the point where even junk bond yields are in single digits. Two: interest-rate rises could be on the horizon, implying lower bond prices.

See our view on all the major asset classes here.


I’m still shorting France, QE or no QE

European money printing may be on the cards. But Bengt Saelensminde’s not ready to give up on his French trade just yet.

Dr Pippa Malmgren: Brace yourself for an inflation explosion

Stick to buying good brands, says asset management guru Dr Pippa Malmgren – and worry about your income.

The assets to buy into now - April 2014

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.

How to build a bond ladder

Reduce your risk to interest rate volatility by building a ‘bond ladder’ portfolio. Phil Oakley explains how.

The assets to buy now - March 2014

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.

The bond party is getting raucous

Rampant bond-buying could well end in a hangover for investors.

The assets to buy into now - February 2014

Asset allocation is at least as important as individual share selection. So where should you be putting your money? We give our monthly view on the major asset classes.

Don’t write off bonds

Bonds have fallen out of favour recently. But there are still good reasons for holding corporate debt. Phil Oakley explains.

Forget US employment data – watch Treasury yields instead

US employment figures should be taken with a pinch of salt, says Antonia Oprita. What matters to investors is Treasury yields.

The assets to buy into now - January 2014

Asset allocation is at least as important as individual share selection. So where should you be putting your money? We give our monthly view on the major asset classes.

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