Bonds - specifically GILTS
Discussion
I’m putting some money into the markets for a retirement portfolio.
This won’t be needed for 20 plus years, and is there to provide a ‘top up’ income and protect against inflation.
The equities will be a mixture of passive and investment trusts
I want a proportion of the portfolio in government bonds to provide some stability during volatile times, however, I’ve never owned any investment bonds before and consequently have Been doing done some research to teach myself the basic principles.
Am I right to conclude that now would be a stupid time to purchase bonds? The effective YTM are minuscule due to recent capital gains, and with the base rate at .1% the chance of capital losses due to rises in interest rates seems high.
Could some of the more enlightened members confirm if I’ve understood that correctly.
On the basis of “never invest in something you don’t understand” I’m reluctant to start investing in a new (to me) asset.
This won’t be needed for 20 plus years, and is there to provide a ‘top up’ income and protect against inflation.
The equities will be a mixture of passive and investment trusts
I want a proportion of the portfolio in government bonds to provide some stability during volatile times, however, I’ve never owned any investment bonds before and consequently have Been doing done some research to teach myself the basic principles.
Am I right to conclude that now would be a stupid time to purchase bonds? The effective YTM are minuscule due to recent capital gains, and with the base rate at .1% the chance of capital losses due to rises in interest rates seems high.
Could some of the more enlightened members confirm if I’ve understood that correctly.
On the basis of “never invest in something you don’t understand” I’m reluctant to start investing in a new (to me) asset.
Fairly accurate. There are other bond asset classes available, other than gilts, which offer differing yields, but of course with differing risk characteristics.
Perhaps, some kind of managed fund, with the manager able to move into bonds or other assets may be an appropriate vehicle for you, if you are not comfortable in making asset allocation calls yourself?
Perhaps, some kind of managed fund, with the manager able to move into bonds or other assets may be an appropriate vehicle for you, if you are not comfortable in making asset allocation calls yourself?
ellroy said:
Perhaps, some kind of managed fund, with the manager able to move into bonds or other assets may be an appropriate vehicle for you, if you are not comfortable in making asset allocation calls yourself?
This is what I do as I don't know enough about rebalancing asset classes plus I'm not good at watching things lose money even if they're supposed to be doing so because something else is gaining at that point.I have a fair bit in Troy Trojan.
They seem to favour US TIPS (index linked) for their bond exposure.
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