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A Guide To High-Income Bonds & Equity Income Funds
Pay attention. This is the last in our series on bonds, and we are looking at high-income bonds. Note the “high income” part of this bond’s name. Sounds tempting, and so it should as these schemes offer good returns.
But you have learnt that if it looks too good to be true it usually is, and the caveat to the high income is that your capital is linked to the stock market.
Know that high-income bonds are also known as precipice bonds. As in about to fall over the edge of a precipice.
Bonds: Corporate Bonds & Distribution Bonds For Safer Investments
In our crash course on the alternatives to the stock market, we’ve already touched on bonds, namely guaranteed income bonds and premium bonds. We now look at a few other variants on the theme.
The first are distribution bonds. These are operated by life insurers and mix gilts with equities and corporate bonds. They can also involve commercial property, a boom sector in recent years.
The key thing to remember here is that you can lose your capital. But these bonds can offer some income and steady growth. At present, they are a decent investment, giving a yield of around 5%. Since your savings account is paying you around 4%, these bonds look attractive. And you may be getting next to nothing leaving your cash in some bank accounts.
And what is yield?
Your Future Options: Guaranteed Income Bonds
Because no-one is sure which way the stock market will jump, and savings are offering low returns, investors are looking ways to beat the market. It is impossible to give any definites, but you should at least be familiar with the options.
We’ve touched on the risky side of investing with spread betting, and now look at some safer options. One of these is a guaranteed income bond (Gib). These are run by life-insurers and not, as with your savings account, by banks or building societies. Interest on Gibs is paid net of basic-rate tax. Non-taxpayers cannot reclaim it.
100 Ways To Save Money
The Daily Mirror has one of those articles that try to make you save your cash by making money FUN. Are you having fun yet? Let’s see…
In 100 Wacky Ways To Save Your Cash, the paper tells its readers how to save money.
One way – and one that is inexcusably overlooked – is not to spend 40p a day on the dire Mirror and read Kerching for free instead.
So to the list. And the top way of saving money is…
Forget the Lottery And Take A Safer Bet On Premium Bonds
Remember a few years back when the National Lottery ran adverts that said, “It could be YOU”? Well, I bet that it was not YOU, and that YOU have not been singled out by the Lottery’s finger of fate.
Want to know why? It is because the chances of YOU winning the Lottery are many times higher than the chances of YOU not winning the Lottery.
Of course, you know this, and hearing it again is only upsetting YOU all the more. But we are here to help not to hurt, and before you rush out buy a few dozen comforting scratchcards, read on. If you want to gamble, take a look at Premium Bonds.
Check Your Bank's EAR And Consider Alliance & Leicester For A Zero Per Cent Overdraft
A few years back, the banking sector was dominated by the so-called Big Four. These four banks – Lloyds, Barclays, Midland and Natwest – bestrode the high street.
And then came the introduction of competition. Times became tougher - and the Big Four knew it. Lloyds became LloydsTSB and Midland renamed itself HSBC, a rebranding strategy to reflect the new market conditions.
And still we bank with them. We do so because they offer security for our cash, offer various benefits and we are creatures of habit. Ask yourself this: when was the last time you changed your bank account?
If University Is Not For You Get An Apprenticeship And Earn On The Job
Once upon a time, the Confederation of British Industry conducted a survey to find out what school leavers knew.
The findings made for sober reading. The CBI said 42 per cent of the employers it surveyed were unhappy with school leavers’ reading, writing and number skills. Employers are confronted with too many staff who lack the basic skills to perform well at work.
The Poverty Timebomb: A Quarter Of Us Do Not Save At All
The Post Office might lose that cheque in the mail, but it knows the value of money. And 23.7 per cent of us know that value of a survey.
Post Office research found that one in four people does save but not regularly. And one in four fails to save any money at all.
And of those that do save, most use it not for a rainy but to avoid one - they use the cash for a holiday.
Worrying?
The FTSE Remains A Good Investment Over Time But Investors Seek Security In Cash
Stock markets around the world have been in turmoil. The fear is that the crisis in the US housing market could undermine the global economy.
Last Thursday, the FTSE 100 - the index of the UK's largest publicly quoted companies - lost over 4% of its value.
It looks bad. Shares go up is good. Shares go down is bad. At least that’s the impression. But neither need be unpleasant on their own. The FTSE remains a sound investment.
Britain On Edge Of A Debt Mountain: 23% Of Brits Have No Savings
Almost one in four Brits (23%) have no savings set aside for a rainy day – and parents with young children are those most likely to be living on the edge – according to new research from Combined Insurance.
At a time when there is growing concern that interest rate hikes could leave homeowners struggling to service a debt mountain*, Combined Insurance polled a GB representative sample of 2,300 people to establish how much emergency money Brits had and could quickly access for a rainy day.
Labour Government Takes Credit For Stock Market Crash
As Dizzy notes: Just a quick observation that's been made before, but when the stock market was doing well, Blair and Brown were very quick to boast about it as evidence of Labour's economic credibility and successful stewardship of the economy.
Anyone want to bet whether they'll be accepting responsibility for the £63bn that was wiped off the FTSE 1000 yesterday as my pension value hit the bottom of the barrel? Of course they won't, because causality is much wider than the Government alone. Just like the causality of the "good times" was as well.