Unravelling the mysteries of Bonds
The last two issues of Thinking Ahead have concentrated on cash and equities, two staple investments in many investment portfolios.
This month, we move to bonds – perhaps the least well-understood type of asset. Bonds feature in most people’s investment portfolio, even although you may be blissfully unaware that you own them. Bonds are particularly useful for people who are taking income withdrawals from their pension fund, because they pay a fixed income.
But what are bonds? What makes their price move? How does the yield from bonds relate to the price? And what are the risks and rewards?
This month’s issue aims to demystify bonds, bringing you information to help you decide whether they should form part of your investment portfolio. It’s important reading for anyone who holds bonds – or suspects that they do!John Lawson - Editor
What does the jargon mean? What makes the price of a bond go up or down... and how does the price relate to the yield? We’ve got the answers.