GoSeigen wrote:This is a refreshingly open-minded, evidence-based way of looking at things.
Thanks. That TG26 one, was the only one I studied. I'm going to continue with this by choosing some other examples.
I recently discovered this site, which generates nice historical reports on gilt issues, and lists issue date as well, a datum which I'd struggled to find elsewhere.
https://www.dmo.gov.uk/data/pdfdatarepo ... Code=D2.1EWhat I want to get an idea of, is the relationship between the returns that people could have made (e.g. around the Brexit event) and a gilt's characteristic properties (maturity, coupon, purchase price/yield, issue date), so that we can figure out what of the currently available gilts could be useful to us in provision of a buffer against similar events.
GoSeigen wrote:The average retail investor looks at gilts and the 1.39% yield and says there is no way they can make any money from them.
GoSeigen wrote:Maybe your study above gave you some ideas...
Indeed yes. I have to say that we are both very grateful to everyone's patience on this and other subjects. As you've all pointed out, holding gilts is an interesting insurance policy against the descent of equity prices.
GoSeigen wrote:Again, I reiterate I am not making a case for gilts right now, just making the point that they have had their place, and who knows, may be useful again in future.
Are you implying that me and Mel buying gilts right now, is not a good idea? Are they generally overpriced at the moment?
Using TG26 as an example, sinking a bunch of money that I was going to
mainly place into a 1.25% savers account into these gilts does even now seem like a reasonable idea since the yield is still better that the saver account, and as said could profit further if a "Brexit style" event happens.
But having said that, the above gilt would tie down the money possibly for 8 years, so perhaps we'd be better off finding something with slightly less maturity/duration?
Anyway, should we hold fire for now (wait and see if gilt prices fall?) or is purchasing a gilt at "an acceptable price slightly over par", with some kind of yield (1.2-1.4%) a reasonable insurance policy for us from now for the next few years?
GoSeigen wrote:What is great to see here is people interested in actually studying this stuff and understanding bonds.
Definitely. I'm finding studying bonds really interesting, and I'm surprised how rich a topic it is. In fact when me and Mel first decided to try our hand at investment in general I think we both considered that it would turn out to be a boring chore. It is currently turning out to be quite the reverse!
Matt