Corporate bond and equity income funds-timing relevant?

homerhotspur

If I wanted to invest in some corporate bond or dividend paying funds, is timing the investment relevant or does it all come out in the wash as it were.

I'm thinking of the effect of dividend and interest pay out dates.

Masomnia

Tbh I think trying to time the market is pointless. But opinions will vary!

Reaper

In theory it makes no difference, the buy price will increase as the dividend date approaches then drop down again afterwards.

bigfreddiel

the age old saying

"time in the market not timing the market"

fj

homerhotspur

Thanks folks. I assumed the unit price would reflect the known facts such as an interest or dividend payment and it would be pretty pointless, especially via a fund, trying to work out any advantage in investing at a certain time.

guitarman001

Any recommendations for corporate bonds?
As long as the company survives until maturity date, you get back all your capital, plus your annual coupon, right? So much less riskier than shares.

talexuser

guitarman001 wrote: »

So much less riskier than shares.

Somewhat less risky than shares, but the high yield bonds are high yield because those companies may find it more difficult to borrow money on the market because they are seen as higher risk of losing market share or going bust, and may not be there to pay back the capital on redemption.

EdGasket

..is everything.
Equities are currently high so might be worth waiting until June (old addage: Sell in May and go away, buy again on Derby day) and see if they come back/fall off a cliff with the next Euro scare or whatever.

Corporate and any sort of Fixed-Rate bond is a no no right now. Reason being that interest rates are at record low and the bonds are expensive. However the BofE has signalled it is happy for inflation to go higher and inevitably interest rates will follow at which point your fixed-rate bonds, be they corporate or government will fall in value.

My advice therefore is to invest in Index-linked gilts either through an ETF such as INXG or through Legal and Generals Index-Linked Gilt funds (income or Accumulator) which only have 0.25% management charge and no other fees if you invest through most sharedealing sites e.g. TD Direct Investing. Then keep an eye on equities and if there is a 'crash' or decent fall, invest some of your money in equities. gl

Ref. "I'm thinking of the effect of dividend and interest pay out dates." - timing makes no difference here really; once a share/fund goes ex-dividend, the price drops by an amount equal to the dividend, all other things being equal that is.