{"id":5946,"date":"2019-05-17T10:28:22","date_gmt":"2019-05-17T10:28:22","guid":{"rendered":"https:\/\/www.foxymonkey.com\/?p=5946"},"modified":"2019-05-17T10:49:47","modified_gmt":"2019-05-17T10:49:47","slug":"does-anyone-own-bonds","status":"publish","type":"post","link":"https:\/\/www.foxymonkey.com\/does-anyone-own-bonds\/","title":{"rendered":"Does anyone own bonds, nowadays?"},"content":{"rendered":"\n

It doesn\u2019t take a genius to understand that in today\u2019s low-interest environment savers are being punished. The interest on your mortgage is very low but your savings aren\u2019t earning much either. The typical current account interest rate here in the UK is 0.1% with some banks paying higher interest for a fixed amount.<\/p>\n\n\n\n

As we climb higher the risk scale, we meet bonds. This article explains the reasons for owning bonds. Everyone knows that bonds are riskier than cash which is the risk-free option for our money.<\/p>\n\n\n\n

But people don\u2019t express their love for bonds lately and I can see why. The 10-year UK<\/a> government bond (UK Gilts) pays us a measly 1.04% per year right now, with the US paying 2.47%. You would usually buy bonds through an ETF though, such as VGOV which right now yields<\/em> 1.3%. Not high either!<\/p>\n\n\n\n

So if you invest \u00a31,000 you will get \u00a313.00 back at the end of the year. Now that\u2019s better than nothing but it\u2019s quite a low return on your money. So I can see the \u201cI don\u2019t own any bonds\u201d argument.<\/p>\n\n\n\n

But why do bonds exist anyway if they pay so little? Are people still buying them? <\/p>\n\n\n\n

Why you should own bonds<\/h2>\n\n\n\n

This is the global stock market next to the bond market between September 2018 – Dec 2018.<\/p>\n\n\n\n

\"December