Warren Evans Bond

kerri_dfw

They've just released an application for 7.5% interest on a 3 year bond. I've used them to buy furniture before, but I wanted to ask for advice on investing in bonds as I've never had savings before and we're saving for 3-4yrs for a deposit on a house.

Jevvers

Ditto. It's an attractive rate but I don't know how to judge the risk.

kerri_dfw

They do make beautiful furniture, we have a large order coming next month, but whether we should become investors as well as customers I'm not sure. I'm going to gamble the minimum of my own savings I think as it might pay off, however I would like to know how to judge the risk to know whether to invest any of my OHs inheritance or not.

gozomark

are you prepared to lose all the money you invest ?

kerri_dfw

gozomark wrote: »

are you prepared to lose all the money you invest ?

so investing in the bond is the equivalent of saying "there's a bloke down the road that wants some help in expanding his business, I might lose everything, but then again it might pay off...so I'll put in what I can afford to lose" ?

dunstonh

kerri_dfw wrote: »

so investing in the bond is the equivalent of saying "there's a bloke down the road that wants some help in expanding his business, I might lose everything, but then again it might pay off...so I'll put in what I can afford to lose" ?

effectively, yes.

kerri_dfw

Ok I understand thanks. I shall put it to my OH that way and we can then decide how much confidence we have in them still being profitable in 3 years time. Thank you

ColdIron

kerri_dfw wrote: »

we can then decide how much confidence we have in them still being profitable in 3 years time

You are not a shareholder so it's not a question of how profitable they may be in 3 years but whether they are still in business and can meet their obligations to their bondholders

kerri_dfw

ColdIron wrote: »

You are not a shareholder so it's not a question of how profitable they may be in 3 years but whether they are still in business and can meet their obligations to their bondholders

ok, yes I understand I think I just worded it badly.

Jevvers

I agree. There must be some risk to expansion as cash flow can get stretched. I am inclined to go for it with a decent chunk but not so much that it would be a disaster if we lose it!

jimjames

kerri_dfw wrote: »

They've just released an application for 7.5% interest on a 3 year bond. I've used them to buy furniture before, but I wanted to ask for advice on investing in bonds as I've never had savings before and we're saving for 3-4yrs for a deposit on a house.

If you are doing this then I'd say it was definitely not suitable even if you have all the money now.

It isn't something that you can easily add a few quid to each month and as others have said you could lose all your money. Remember the capital is only guaranteed at redemption of the bond so if you sell it before you may make a loss even if the company is still trading.

Saving for a house deposit is probably best in a savings account although if you are prepared to risk it then you may want to look at the stock market too even though 4 years would be too short in many eyes.