dealtn wrote:Oggy wrote:I have been musing on buying single bonds ...
Some Qs then if I may - and forgive my ignorance.
I am assuming gilts will preserve the wealth if there is an equities crash. Is this correct- always proving HMG does not default I suppose!
No. Gilts can crash also, and even if held to maturity the effect of inflation on your wealth isn't protected, and even if you bought index linked gilts, that wealth preservation only happens if you buy them at par (or better).
And the inflation measure is relative to a basket of consumer prices that may not match your particular consumption and where that inflation rate has broadly lagged house and stock share prices inflation; And where some of the returns may be taxed; And where its somewhat similar to cash deposits, its not you as the lender that gets to define the terms/conditions of the loan, rather its the borrower that sets the terms/conditions/rates.
Better than hard-cash, but still mostly for losers. I consider what bonds our pensions hold to be way more than enough exposure to that asset class, wouldn't add to that by lending some of my own capital.
Nowadays when you lend say £50,000 to a bank i.e. "deposit" into a "savings account" you may very well be subject to a string of questions if you want some of that repaid to you. £2000 - oh that's a lot, why do you want it? What its for? We suspect you may be money laundering so we wont clear that until we've informed the state and got its OK. Might be extended as per other walks ... sorry you're a member of the wrong religion (where social housing or medical treatment may be deferred/refused, or your birth certificate/passport defaced). Similar for lending (depositing), prove where it came from ...etc.
