When you place a deposit with a bank, buy a gilt or a corporate bond, you are in effect lending your money to those with a need to borrow from you. In return you expect to be paid interest on your loan and get your money back. This note is a primer on understanding how bonds work and why who you lend to, and for how long, matters.
This article does not constitute financial advice. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner to take into account your particular investment objectives, financial situation and individual needs. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections.