colin wrote:GoSeigen:
I recently bought £60,000 worth of corporate bonds (not even shares) which are "economically almost exactly the same as gilts" and suffered an economic loss of 100% of that money within three months due to circumstances diverging temporarily from "normal".
Wow! that would be a devastating blow to most people. It would be interesting to learn what the credit rating was of these bonds and which agency gave them the rating?
FredBloggs wrote:I was thinking the exact same thing, there may be a lesson worth sharing here?
I reflect that some of the retail bonds issued have failed too. No wonder the market doesn't seem to have taken off as expected.
Would be happy to discuss another time. I'm not sure it's relevant to to the point, or to this thread.
The lesson is as stated: the only way you can say that shares (or corporate bonds) are the same as gilts without looking a fool is by making narrow and unrealistic restrictions on the periods and manner in which you compare them. Outside of those periods the difference can be devastating.
GS