Are Government Bonds a Good Investment

[Commercial]

Hi there,
I some money to invest and I want to take a low risk option. However, I believe that Irish Government Bonds maybe a good option.
I know people are saying that the government might yet default, but why are the IMF pumping in so much money into us and then let us default?

I am hoping that someone might help me with their views

 

[aristotle]

Govt bonds are not low risk. If you can accept a degree of risk (e.g. I think I read that the markets have priced in a 25% chance of the Irish government defaulting on debt) then you can get a decent return on the bonds.

 

[Brendan Burgess]

Rory Gillen(?) had a good article in the Sunday Times a few weeks ago saying that you should view Irish government bonds like equities.

Potential for good returns c. 8% per annum, but volatile.

The income is taxable at your marginal rate.

The capital gain which is a substantial part of the return is not taxable. Likewise, any capital loss, cannot be set against capital gains.

So probably suitable for around 5% to 10% of your portfolio.

Brendan

 

[Chris]

Hi there,
I some money to invest and I want to take a low risk option. However, I believe that Irish Government Bonds maybe a good option.
I know people are saying that the government might yet default, but why are the IMF pumping in so much money into us and then let us default?

I am hoping that someone might help me with their views

Subsequent to Argentina's last major IMF bailout they still defaulted on debts with the tune of 30 cent on the dollar. Just because the IMF are here doesn't mean that Ireland's debts are manageable. I would say that quite the opposite has happened.