Interest Rates

[Irish]

Any good deals out there? Seems sticking cash under the bed is the only thing to do. HSBC have informed me that my rate is now: 0.40%....

I guess overpaying the mortgages is the No. 1 investment.

A

[seaninog]

I'm looking at two things for my cash:

1. Corporate bonds of well capitalised businesses e.g. Marks and Spencer 5.625% March14 bond yields about 7.5%
2. Build a Portfolio of non-cyclical equities e.g Vodafone div yield is 5.5%

Both are also reasonably liquid (the equities more so than the bonds, of course) and I think it is hugely important to maintain liquidity in this market.

But I confess to being slightly more risk-friendly than many. I agree with Buffett at these times "When others are greedy, it's time to be fearful; when others are fearful, it's time to be greedy"

Edited by seaninog on Sunday 15th February 12:17

[Andyuk911]

Would a punt on Lloyds be toooo risky ?

Edited by Andyuk911 on Sunday 15th February 13:08

[Tuscan Tart]

Irish said:

Any good deals out there? Seems sticking cash under the bed is the only thing to do. HSBC have informed me that my rate is now: 0.40%....

I guess overpaying the mortgages is the No. 1 investment.

A

Barclays is a measly 0.25%

Abbey are giving 3% on an IAS.

I think I am going to ask my boss if I can put the money I set aside for corp tax into Premium bonds, just to see if we get a better return.

Edited by Tuscan Tart on Sunday 15th February 14:22

[Tuscan Tart]

haworthlloyd1 said:

Tuscan Tart said:

Irish said:

Any good deals out there? Seems sticking cash under the bed is the only thing to do. HSBC have informed me that my rate is now: 0.40%....

I guess overpaying the mortgages is the No. 1 investment.

A

Barclays is a measly 0.25%

Abbey are giving 3% on an IAS.

I think I am going to ask my boss if I can put the money I set aside for corp tax into Premium bonds, just to see if we get a better return.

Edited by Tuscan Tart on Sunday 15th February 14:22

max £30k in premium bonds per person though

Yeah I know, it's a relatively small company so that figure is about right, but the loss of interest is negligable, and who knows we may win?

[NoelWatson]

seaninog said:

1. Corporate bonds of well capitalised businesses e.g. Marks and Spencer 5.625% March14 bond yields about 7.5%

Edited by seaninog on Sunday 15th February 12:17

What do you think the chance of M&S defaulting on their debt over the next five years is?

[seaninog]

haworthlloyd1 said:

seaninog said:

I'm looking at two things for my cash:

1. Corporate bonds of well capitalised businesses e.g. Marks and Spencer 5.625% March14 bond yields about 7.5%
2. Build a Portfolio of non-cyclical equities e.g Vodafone div yield is 5.5%

Both are also reasonably liquid (the equities more so than the bonds, of course) and I think it is hugely important to maintain liquidity in this market.

But I confess to being slightly more risk-friendly than many. I agree with Buffett at these times "When others are greedy, it's time to be fearful; when others are fearful, it's time to be greedy"

Edited by seaninog on Sunday 15th February 12:17

what would happen to the capital value of the bonds if the govt start selling lots and lots of gilts?

This is already priced in. That is why the yield has gotten so high already (relative to where it was and prevailing interest rates). Ultimately while there may be some pricing variations due to further increased Govt issuance of Gilts, the main risk here is the market's perception of M&S's ability to repay. Do I think M&S are solid? Yes. In as much anyone is "solid" in this environment. There is certainly risk involved in the proposition (that's why you're getting the extra return) but I think it's measured and reasonable.