and central banks are able to cut interest rates, then government bonds should do reasonably well. Some of the good news is already reflected in the price; the 10-year US Treasury bond yield has dropped from 5 per cent in
Bonds are a loan to a company or a government for a set amount of interest over a set amount of time. Government bonds are usually seen as very safe investment asset because you are essentially lending the government money, and it is very unlikely the government would default on the loan....
@Lupulco — I don’t agree I’m afraid. I use self-select ISAs as they used to be called (i.e. I buy shares, bonds, ETFs, funds etc within an ISA wrapper) and the fees vary from cheap to free (provided you trade 4x a year in the latter case). Mine have had flat fees, to...
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spends. It therefore does not borrow to spend. Political rules force the government to issue government bonds (gilts) that carry an interest rate that is higher than the banks receive when holding funds at the BoE. This means that banks find it profitable to use their reserves to buy gilts...
I spent a long time wandering the desert trying to find that place, seemingly getting nowhere. Meanwhile, all around me were these littlerules of thumb. Handy guidance tools that seemed to point away from asset allocation paradise and towards the quick departure lounge to ‘that will do’. ...
When it comes to the bond part of the portfolio one has to realise that you either go for a bond index fund/ETF that invests in domestic (government) bonds such as German Bunds or UK Gilts or you will end up with a European portfolio with high weightings in countries such as Italy...
which is used to calculate the present value of future pensions, to be based on government rather than high-quality corporate bonds. This would push up pension-scheme liabilities, which vary inversely with the discount rate, because gilts are safer than company debt and so have a lower yield....
I don’t evenown my own home– the one kind ofassetthat almost all flavours of government tend to treat more reverentially than they do ‘fat cat’ assets like shares, bonds, and cash (at least until you reach genuine fat cat levels and your house has a front lawn they can really pa...