Duke of Marmalade
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The conventional wisdom in these parts is that you can never make any inference about whether stock markets are expensive or otherwise. No one can tell.I would imagine they are a good place to dump money when equities are expensive but now the stock markets is declining so it's surely the wrong time to be buying prize bonds or any low risk assets.
The conventional wisdom in these parts is that you can never make any inference about whether stock markets are expensive or otherwise. No one can tell.
What almost any commentator would say though, is that the future for stockmarkets is hugely uncertain at the present time - from V shaped bounce to worst depression since the 30s. So it is valid to assume that they are much riskier than usual at the moment and therefore low risk assets are especially to be favoured by anyone of a nervous disposition.
Bravehearts on the other hand will argue that the elevated perception of the risk of equities will have fed through to the price - the risk reward argument.
Understand that their new system is they ‘credit’ you with additional prize bonds - but you can ‘cash out’ at any time....
Perception of risk by market practitioners is actually measured in the US by what is called the VIX index. It is a complicated animal but if you want to take it at face value it measures how risky practitioners view current market prices. It is dubbed the Fear Index. See it here... it seems to me that risk is less...
Perception of risk by market practitioners is actually measured in the US by what is called the VIX index. It is a complicated animal but if you want to take it at face value it measures how risky practitioners view current market prices. It is dubbed the Fear Index. See it here.
You will see that the Fear Index has been greatly elevated in recent times and whilst it has eased a little it is still around 3 times higher than before the crisis. However, that is just what the folk on Wall Street think and you may be right.
Perception of risk by market practitioners is actually measured in the US by what is called the VIX index. It is a complicated animal but if you want to take it at face value it measures how risky practitioners view current market prices. It is dubbed the Fear Index. See it here.
You will see that the Fear Index has been greatly elevated in recent times and whilst it has eased a little it is still around 3 times higher than before the crisis. However, that is just what the folk on Wall Street think and you may be right.
I beg to differ though it may be mere semantics. I appreciate that VIX is not some sort of poll of how practitioners “feel” about current risks. It is more tangible than that, it is how they price the risk.VIX is Volatility IndeX - it is derived from the implied volatility measure from equity options. Increased implied volatility might imply more risk but it isn't a direct measure of how practitioners feel about risk. Implied volatility is partially derived from historic price volatility along with current option pricing - so it isn't completely forward looking
No-one knows if equities are cheap or expensive, right now. The nature of equities is that they can fall and continue falling till they reach zero. Remember the blue chip Irish banks?I would imagine they are a good place to dump money when equities are expensive but now the stock markets is declining so it's surely the wrong time to be buying prize bonds or any low risk assets.
It doesn't seem like you can download the purchase form at the moment.Guys,
Just wondering if anyone has purchased prize bonds or their equivalent from any other country & what is their experience. I have heard the premium bonds in UK are much better option than Irish prize bonds as prizes are higher & there are more weekly prizes. The top prizes in the Irish prize bonds have lowered significantly in the last few years & there are a lot more bonds purchased so chances of winning are greatly reduced.
GBP interest rates are higher than Euro Interest rates, so it's not surprising that premium bonds pay a higher rate.I have heard the premium bonds in UK are much better option than Irish prize bonds as prizes are higher & there are more weekly prizes.
The prize fund is calculated as a set percentage of the total funds, so more prize bonds means more prizes. Less chance of winning big, but there are extra small prizes. The maths is all explained earlier in the thread.& there are a lot more bonds purchased so chances of winning are greatly reduced
Other half has won €1,200 from 120k worth of prize bonds over 2 years approx. Bought out of curiosity after reading this thread, a no brainer compared to deposit interest.
It doesn't seem like you can download the purchase form at the moment.
I'd be curious to know if prize bonds in other European countries are attractive too??
The average outcome over the two years would have been c. €750. I calculate that €1,200 would be in the top 6% of outcomes, so he mightn't be as lucky in future. Better than deposits for sure.Other half has won €1,200 from 120k worth of prize bonds over 2 years approx. Bought out of curiosity after reading this thread, a no brainer compared to deposit interest.
I'm sure you must be resident in the UK to be eligible to purchase prize bonds, same as opening a bank account really.
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