"There are few guarantees for investors—but the company behind the bonds I looked at will not be in danger of bankruptcy"by Andy Davis / April 21, 2016 / Leave a comment
Published in May 2016 issue of Prospect Magazine
In common with a lot of small business owners who end up running their own financial affairs, my eldest brother has grown pretty tired of braving the ups and downs of the stock market in search of steady investment income. So when he phoned up a few weeks ago, we talked about other options. What about corporate bonds, he wondered.
I last ventured into the London Stock Exchange’s retail bond market about four years ago, when I was seeking ways to generate income for our late mother. It worked well then, and, prompted by my brother’s inquiry, I went back for another look. The choice today is much broader than it was then: a large number of bonds that are easily available to DIY investors no longer trade at a big premium, enabling you to buy them roughly “at par,” allowing for dealing costs. This means that you’ll pay about the same price they were issued at, normally £100 for bonds with a face value of £100.