Gilts - pricing

Veloflyer

Many thanks again. One of them is up nearly 2K already - after 4 days since purchase - the 10/8/31 ILG. Just interesting to know that should I have the need to sell, that one at least will not lose me money. Obviously I appreciate things can change! I'll stress again that the intention is to hold until maturity.

As an aside, I assume the rise in price is a reflection of demand? Are folk thinking that inflation will rise over the next few years?

Storcko14

TR31 is up sharply in the last few days but TBH I wouldn't fixate too much on that. With over 5 years to maturity there's every chance it'll fluctuate so you can't guarantee that if you need to sell the price will be to your liking.

I have done similar to you and have a ladder to SP age which I don't bother price tracking. It's there to do a specific job, I'll let the maths take care of itself and if I have to sell, it'll not be one of the ILGs. That's what cash is for, right ;-)

MarkCarnage

https://forums.moneysavingexpert.com/discussion/comment/81944837#Comment_81944837

So it's up about 1.5%….what makes you think that if you had to sell it, you won't lose money? It could just as easily fall more than that if the Gulf induced concerns about stagflation were to recede. I suggest that you should maybe take a look back at a 5 or 10 year price history of gilts and index linked gilts, which will show what can happen in extreme circumstances (or more accurately when extreme circumstances normalise). I'm not suggesting that price moves of that order are likely or even more than an extreme left tail event, but they did happen. At least you've bought with a positive real yield and will therefore get a positive real return if held to maturity….

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/81944982#Comment_81944982

Indeed I do realize there is no guarantee and of course the price may not be to my liking. I was simply attempting to confirming my belief that if the (dirty) price was greater than the price I paid, then if I had to sell, that would be the optimal time. I certainly do not envisage selling and I have other reserves and cash, but I like to cover the bases.