Friday 21 July 2017

Brendan Keenan: Understand one thing about bonds, none are totally risk free

THERE was a sad story, many years ago, about some unfortunate who bought supposedly risk-free government bonds with the money from selling a house while he looked for a new one.

Alas, by the time he found a new house, some political/ financial crisis had caused a 20pc fall in the value of the bonds.

We decided not to carry the story, interesting though it was. It was just too complicated trying to explain bond yields and how "risk-free" in this case did not mean no risk.

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