To buy or not to buy (invest)?

bonds

To get a decent return from a bond investment it is necessary to consider high yield, but the level of expertise required to invest in this area means it can be beneficial to buy a fund rather than invest direct

The search for yield has become the phrase du jour among investors in today's low return environment, with the allocation between equities and fixed income an important part in securing the highest possible income. According to the graph below, it would appear that equities are fairly attractive compared to gilts. While the redemption yield on 10-year UK gilts stands at 4.3%, the FTSE All-Share is not far behind at a healthy 3%, and it also offers capital uplift. However, all is not as it may appear. Some investors want not only yield but capital safety too. This is where bonds can come i...