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Post by gravitykillz on Mar 9, 2019 22:48:26 GMT
Was just wondering how people in general pick what bonds to buy.
Do you
1. Purchase companies you recognise
2. Go for companies with the highest interest rate
3. Go for bonds paying interest in the next few weeks.
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macq
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Post by macq on Mar 9, 2019 23:28:06 GMT
1.partly the name and how the bonds have been rated by a rating agency and then what sector there in as maybe not keen on retail or debt.
2.Then how long the term and what % its paying and is it at a premium or discount.Also while there is a big risk in the fact they are notes & not the bonds i would still only look at secured bonds(but by some reports that did not help with DH Evans)
3.Not sure the interest in a few weeks matters as when you buy the note you pay the accrued interest
And then after all that i probably know about 5% of what a good bond fund manager knows!
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benaj
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Post by benaj on Mar 11, 2019 14:12:41 GMT
I haven't been WA for long, 8 months max. In the past, I picked up loan notes on WA like a newbie. I misunderstood the effect of "volatility". Some loans are under-performing in the 6 months time frame. Some are doing what I expected. I haven't seen any my loans outperforming yet.
I had loans repaid before mature date, like Cog, TOGSUB. The XIRRs are 6.06% (2 months COG) & 4.61% (4 months TOGSUB), net return after service fees
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Post by gravitykillz on Mar 11, 2019 14:49:05 GMT
Received a interest payments on the 7th March from william hill but it still states 'payment processing' strange considering its almost 4 days now. But anyways thanks for the feedback. Im sure we can all mean what the best things to look for when selecting a bond.
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zlb
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Post by zlb on May 30, 2019 9:03:53 GMT
Well you know that (some of) the 12% platforms are returning a blended return of far less, that a company offering 8% over three years just went bust and that uniquely of all the platforms around here, wiseAlpha’s offering is kinda priced by real public markets so should offer a correctly priced risk/reward. Since long term returns on the stock market are about 7% and you probably joined wiseAlpha for a reliable return, and you want more than a building society, look for bonds offering somewhere between 3% and 7%. Don’t place any weight on household names, Woolworths? BHS, etc, and ignore the gimmicky marketing emails. Hi, I opened an account with WA years ago. Never used. Interested in your comment about it being 'kinda priced by real public markets', is that your supposition, or is there more detail on that?
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benaj
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Post by benaj on May 30, 2019 12:08:39 GMT
Hi, I opened an account with WA years ago. Never used. Interested in your comment about it being 'kinda priced by real public markets', is that your supposition, or is there more detail on that? I’ve asked a few times how the bonds were priced and I’ve never got a straight answer apart from some vague reassuring noises that they are smart enough for me not to worry. I still don’t really know and as a consequence I don’t know if they buy £100,000 of a bond at a price to suit them or me. Either way, I got cold feet after a few months and sold all my holdings and ended up about even after the (huge) 1% sale fee. I think I was trying to be generous in the post above since I like and admire what they are *trying* to do but, like bond mason, I don’t think it works so perfectly in practice. If I remember correctly, the sale fee is 0.25%, the note price may also change during the sale process and WA will notify the investor to adjust the price for quicker sale. If everything looks good, someone might get lucky and make a profit on a sale, of course it can go the other way too. www.wisealpha.com/how-it-works
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jaswells
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Post by jaswells on May 30, 2019 12:21:13 GMT
Hi, I opened an account with WA years ago. Never used. Interested in your comment about it being 'kinda priced by real public markets', is that your supposition, or is there more detail on that? I’ve asked a few times how the bonds were priced and I’ve never got a straight answer apart from some vague reassuring noises that they are smart enough for me not to worry. I still don’t really know and as a consequence I don’t know if they buy £100,000 of a bond at a price to suit them or me. Either way, I got cold feet after a few months and sold all my holdings and ended up about even after the (huge) 1% sale fee. I think I was trying to be generous in the post above since I like and admire what they are *trying* to do but, like bond mason, I don’t think it works so perfectly in practice. EDIT: sale fee was only 0.25% (Thanks benaj ) It does appear bonds are generally priced according to the underlying market as my portfolio value tends to shift in line with the move in bond prices. Generally speaking bond prices are meant to be more stable than equities. I think WA buys and initially sells tranches according to the prevailing rates. Seems pretty straightforward but certainly rewards long term holders as bonds arent really for trading in and out of due to significant spreads.
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p2pfan
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Full-Time Investor
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Post by p2pfan on Jul 20, 2019 21:33:42 GMT
I’ve asked a few times how the bonds were priced and I’ve never got a straight answer apart from some vague reassuring noises that they are smart enough for me not to worry. I still don’t really know and as a consequence I don’t know if they buy £100,000 of a bond at a price to suit them or me. Either way, I got cold feet after a few months and sold all my holdings and ended up about even after the (huge) 1% sale fee. I think I was trying to be generous in the post above since I like and admire what they are *trying* to do but, like bond mason, I don’t think it works so perfectly in practice. EDIT: sale fee was only 0.25% (Thanks benaj ) It does appear bonds are generally priced according to the underlying market as my portfolio value tends to shift in line with the move in bond prices. Generally speaking bond prices are meant to be more stable than equities. I think WA buys and initially sells tranches according to the prevailing rates. Seems pretty straightforward but certainly rewards long term holders as bonds arent really for trading in and out of due to significant spreads. Do these significant spreads affect bond purchases and sales made via WA? Many of the loan terms on WA's bonds are until the mid-2020s etc. and I may need to sell earlier, so curious to know about the impact of spreads.
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Post by chrisuu on Jul 22, 2019 16:21:19 GMT
Hi - newbie on here and with respect to Bonds and WiseAlpha in particular.
Just trying to learn as fast as I can
Regarding the AA.com Senior Secured Bond which is £86.00 per £100.00
Either this is a really good purchase ie can expect 11.1% in July 2022 or more like 5.5% ??
Coupon Explainer 5.5%
Current Yield 6.4%
Yield to Maturity 11.1%
Maturity Date 31 Jul 2022
Next Interest Payment 31 Jul 2019
Interest Period 6 months
Cheers for any comments
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Post by chrisuu on Jul 22, 2019 20:02:51 GMT
Thanks will have read
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Post by gravitykillz on Jul 24, 2019 8:29:57 GMT
I don't like the AA as a business. Too much negative company news over the years. I have invested in the RAC though.
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