safest bonds

[fmjvertigo123]

hey guys, what i'd like to know is, if you buy any bonds, are you most likely to never lose your money? what type of bonds are risky and which ones are safe?
what sort of annual percentage can i expect from a safe bond and a risky bond?

thanx guys, much appreciated.

 

[Martinghoul]

Nothing is safe, everything is risky. NEVER assume a bond will NEVER lose you money.

 

[Pento]

As Martinghoul says never assume a bond won't lose you money. The prices of bonds go up and down. So even if you buy a "safe" bond its price could fall and if you wanted to sell it then you'd have to realise this loss in its price and hence value.

In terms of risk the safest bonds are those issued by fiscally solid governments e.g. not Greece or others like it. You can find out the ratings of how safe the bonds are from ratings agencies; Standard & Poor, Fitch, Moody's. I'm guessing the next safest are those issued by states and municipalities of bigger nations. Then we move onto bonds issued by corporations. There are a number of factors which dictate how safe each corporate bond is. E.g. a GE bond would be assumed to be safer than a bond from American Airlines.

I'm guessing you are looking for a bond which you can invest in now and hold until it matures, with no real intention to sell it before it matures. Then in this case I believe the fact that the price goes up and down doesn't impact you much as you hold for the whole duration. What you are more concerned with is how much return you get and the safety of your money. The return on 5 year UK government bonds is roughly 2%. AAA rated corporate bonds yield between 4.5-6%.

 

[William Waller]

hey guys, what i'd like to know is, if you buy any bonds, are you most likely to never lose your money? what type of bonds are risky and which ones are safe?
what sort of annual percentage can i expect from a safe bond and a risky bond?

thanx guys, much appreciated.

Returns vary greatly, but risk/return are still welded together.

Not my area at all, but I would imagine that Norwegian sovereign must be pretty solid.

Gilts are a disaster in the making in my opinion.

 

[Martinghoul]

Hahaha, I like Norwegian sovereign bonds (NGBs) too... Who doesn't?

 

[William Waller]

Hahaha, I like Norwegian sovereign bonds (NGBs) too... Who doesn't?

Doesn't Norway run something like a 14% surplus? Massive capital reserves and monster GDP per capita, if you want as close to safe as you can get...

One thing I don't get - I thought oil wealth a guaranteed ticket to disaster .

 

[Martinghoul]

Well, the Norwegians are running a surplus, based on what's known as their "mainland" GDP (i.e. ex-oil). In general, these high tax Scandi countries have done incredibly well. Sweden will have a balanced budget this year. Denmark has the oldest, best-designed and smoothest functioning mortgage mkt. All of that has more to do with the institutions than with presence or absence of oil.

 

[William Waller]

Well, the Norwegians are running a surplus, based on what's known as their "mainland" GDP (i.e. ex-oil). In general, these high tax Scandi countries have done incredibly well. Sweden will have a balanced budget this year. Denmark has the oldest, best-designed and smoothest functioning mortgage mkt. All of that has more to do with the institutions than with presence or absence of oil.

True enough, actually the point I was making really. I find it striking how human wickedness and stupidity can turn a blessing like abundant natural resources into a curse as it has done in...well, the list is a little long to type out to be honest.

 

[fmjvertigo123]

yeah sorry guys, i meant a fixed return, so the prices wouldnt really affect the percentage return. i want a safe account, pretty much similar to a bank account, however maybe a bit more risky.
but a better percentage return than a bank. i heard about certificate deposits etc.
any good advice for that sort of investment?

thanx guyxz

 

[arabianights]

you can buy some bonds off me

 

[Pento]

I'll give you 50p

 

[Pento]

yeah sorry guys, i meant a fixed return, so the prices wouldnt really affect the percentage return. i want a safe account, pretty much similar to a bank account, however maybe a bit more risky.
but a better percentage return than a bank. i heard about certificate deposits etc.
any good advice for that sort of investment?

thanx guyxz

How long are you willing to lock your money away for? And how much risk do you want to take.

You can get 4% by locking in your money for 2 years in a bank savings account. This would also be covered by the UK's FSCS so you're covered up to £50k per person.

 

[arabianights]

I'll give you 50p

sold