buying corporate bonds

DiggerUK

Jonbvn wrote: »

.......I have held some corporate bonds in my ISA for some time. They have risen in price by about 20-30% over the last year, plus they are paying a 5%+ coupon.Remind me of the dividend that all that gold you hold is paying..

August 13th 2009 gold was 575 GBP an ounce.
August 13th 2010 gold was 777 GBP an ounce.
That is capital growth in my book of 35%.

To get a dividend however you need to sell.
Could have sold in June as high as 865 GBP an ounce.That would have been how much growth? And no risk from inflation or recession. In fact no risk at all.

onetruevoice, If the economy was in such hot shape nobody would be going down the desperate route of these bonds. Jonbvn's rise of 20/30% only represents the demand for these instruments by people desperate to protect their savings and investments. The divi is dire.

If a loan shark issues bonds then by all means buy them.
At least they have ways of ensuring the loan is collected.
You would be better off waiting for NSI ILSC to be re-issued, or like me, buy some gold.

C_Mababejive

Digger..i agree that with the benefit of hindsight,buying Gold was a good idea. But that would only be if you bought at the right side of the curve. It would seem to me that the higher the graph climbs,the more chance that it will level ,dip slightly,and then avalanche. The only thing thats keeping it up is an economy/confidence issue. I'm not pitching as an expert but the only thing propping Gold up is the lack of confidence issue and the perceived/evangelised wisdom that you MUST buy Gold or bad things will happen.

Meanwhile, Corporate/investment grade bonds are backed by solid companies with real tangible assets.

The ordinary man in the street isnt in a position of power and influence.

They ride on the coat tails of others and exist on crumbs from the rich mans table.

When the gold bubble starts to deflate, the smart movers will have already sold out and the small guys will pick up the losses. Just like the housing market.

How quickly will you be able to react and sell physical Gold?

Why they are even trying to stoke a silver market now..!

What next? Pork Bellys?

JamesU

This week's issue of the Investor Chronicle has sections on bonds and gilts and it might be worth picking up a copy to get an overview (will be off-sale on Thurday). First parts of the reviews are available online, but not all of the information:

http://www.investorschronicle.co.uk/InvestmentGuides/Bonds/article/20100813/c0151640-a566-11df-a4a8-00144f2af8e8/Bonds-made-easy.jsp

http://www.investorschronicle.co.uk/InvestmentGuides/Bonds/article/20100813/bdb4ded8-a56d-11df-a4a8-00144f2af8e8/Gilts-a-valuable-haven.jsp

Obviously easy to search IC online for previous info in the same area too.


JamesU

Ogre_Nose_Grid

I have a SIPP with sippdeal and an ISA with idealing. Both are good for the respective products T&Cs-wise, and for trading. Both lousy for research - for that use iii. Around a tenner a trade for each.

I'm also about to open a TDWaterhouse account because of it's global reach (I already have a TDAmeritrade account from my dot com investment days, and can vouch for the platform. Dealling charges are OK, a bit north of a tenner. Global reach is the thing here.

Bonds I've bought in the last two months - NWBD.L and BP-B.L. The NWBD.L is not without risks if the govt decide to suspend divis, which being major shareholders they might.

I'm also minded to put some money into the Bank of Baroda fixed term savings bonds, but that's another story.

It's tricky, saving decisions. I mull over mine for days. But I'm a buy & hold strategist at heart and bonds suit that.

I used to deal through Barclays .... they didn't charge 75 quid but it's robably a fixed fee plus percentage of the trade, you'd be better off going for a flat charge broker.

Jonbvn

DiggerUK wrote: »

August 13th 2009 gold was 575 GBP an ounce.
August 13th 2010 gold was 777 GBP an ounce.
That is capital growth in my book of 35%.

To get a dividend however you need to sell.

You missed the point. I invested in the bonds for income purposes, as a superior alternative to cash. Their increase in price was a complete bonus.

You point about the dividend from gold is completely disingenuous.

You may state that gold is the ultimate safety play. However, if you are expecting Armageddon, best buy a farm and an AK47.;)