Corporate bonds savings

rias1

I have £10000 to invest and its been suggested to me by a finanecial advisor that I put it into corporate bonds and gilts, not sure as to what to do , any advice please:cool: I dont pay Tax

dunstonh

any advice please

What makes you think that unknown people on the internet who know nothing about you can offer better advice and an adviser who does know about you?

The principle of investing in bonds is perfectly fine. However, its difficult to say much more than that as we dont know anything about you. Obviously, they are risk based. The level of risk will depend on the types of bond funds being recommended and your overall savings and requirements.

jamesd

Ask the advisor what the advisor thinks the prospects are for those funds when inflation increases and the effects of fiscal easing are fully out of the system. The traditional answer to those questions is that the capital value will fall significantly.

It doesn't look like a good time to be buying gilts or lower risk corporate bond funds but those are usually towards the lower end of the risk scale and will be again once the exceptional situation we're in now works itself out over the next year or two.

You might instead ask about equity income funds and either strategic bond funds or non-UK bond funds. Those are generally of somewhat higher risk levels but I think that current conditions make them less of a risk than the usually lower risk ones.

It's also worth considering commercial property funds that invest in real buildings rather than property company shares. Those have done a lot of suffering and may do more but should do fairly nicely over the next five or more years.

rias1

many thanks for your replies and I have taken on board what you have said

CLAPTON

rias1 wrote: »

many thanks for your replies and I have taken on board what you have said

invest in nothing that you don't fully understand
make sure you know the likely change in value if we have a period of high inflation, a period of low inflation, a period of high interet rates and a period of low interest rates

if you don't undertsand what will happen to your investment in these circumstances then don't invest in the product.

C_Mababejive

Gurus will know better but my view was not to invest directly in corporate bonds but rather,to do it via a fund.

You can buy such funds via HL.

Other fund providers are available..

Make sure you do your homework as to what sort /grade of bonds the fund invests in.