Gilts short term strategy?

[1nvest]

Just to add I don't feel I understand index linked enough to go there.

Rightly or wrongly I'm attracted to these for the tax benefits and the simplicity and certainty they seem to offer but with the option to "take the hit" and sell in an emergency (unlike fixed rate savings account).

I'm still trying to find the sweet spot and TN28 looks like it might fit the bill.

I did have this money in "wealth preservation" funds but again rightly or wrongly I'm finding them too opaque to be comfortable with them lately plus there's a wider piece of work I'm doing around simplifying and moving more to passive investments.

I'd be more inclined to go with the Index Linked Gilt and as such opine its worth understanding them better, at near 1% real no matter what inflation might be that's a safer choice when the intended spend is on a CPI adjusted price measure. 25%+ inflation, you still win. Deflation and you may lose in nominal terms, however so also had general prices declined (still buys more). And the Treasury will go all out to avoid deflation. With a conventional Gilt, if inflation hits 25%+, your capital is losing out heavily in real terms. They're near as the same on the tax efficient front also.

Another benefit in addition to tax efficiencies, is that they're fully protected no matter how much you might 'deposit', unlike banks and the £85,000 protection limits.

Yet another choice is to spread more widely. Instead of 120,000 in one, 12,000 in ten, spread over 10 years. Assuming each was priced to a 1% real then for 12,000 in ten years time you'd be looking to invest 12,000 / 1.01^10 = 10,863 in the ten year to maturity gilt ... etc. For a 12K/year for 10 years ladder 120K inflation adjusted return (index linked gilts), might cost £113K of present day money to buy. Yielding 12K/year inflation adjusted for ten years, after which perhaps you might have a 12K/year pension kick in. Amounts above/beyond that 113K cost ... dropped into stocks for growth/accumulation.

The Index Linked Gilts are no different, other than they talk in inflation adjusted terms.

[Aminatidi]

That sweet spot is personal and depends how urgently you might need the money prior to redemption. The longer to maturity, the bigger any potential drop. I think TN24 with a redemption date of 31.1.24 is not going to deviate much from a slow appreciation.

That's pretty much my take on it.

Plus trying to understand if current yields are a "do it whilst they last" thing and lock in the return or whether to go shorter dated like TN24 and hope that rates and therefore yields are higher in Jan next year.

And as 1nvest highlights the fact you'd need an equivalent return of almost 6% for a basic rate taxpayer is bloody enticing.

[kempiejon]

Just to add I don't feel I understand index linked enough to go there.

Rightly or wrongly I'm attracted to these for the tax benefits and the simplicity and certainty they seem to offer but with the option to "take the hit" and sell in an emergency (unlike fixed rate savings account).

I think the extra work to grasp linkers is not too much of a stretch, there's a few useful primers around here. I too have made the foray into short dated sub par gilts rather than savings accounts and the tax event I might create there and am looking at linkers as further options, one can add more maturing dates on a ladder with a bit more choice.

[Aminatidi]

I'd be more inclined to go with the Index Linked Gilt and as such opine its worth understanding them better, at near 1% real no matter what inflation might be that's a safer choice when the intended spend is on a CPI adjusted price measure. 25%+ inflation, you still win. Deflation and you may lose in nominal terms, however so also had general prices declined (still buys more). And the Treasury will go all out to avoid deflation. With a conventional Gilt, if inflation hits 25%+, your capital is losing out heavily in real terms. They're near as the same on the tax efficient front also.

Another benefit in addition to tax efficiencies, is that they're fully protected no matter how much you might 'deposit', unlike banks and the £85,000 protection limits.

Yet another choice is to spread more widely. Instead of 120,000 in one, 12,000 in ten, spread over 10 years. Assuming each was priced to a 1% real then for 12,000 in ten years time you'd be looking to invest 12,000 / 1.01^10 = 10,863 in the ten year to maturity gilt ... etc. For a 12K/year for 10 years ladder 120K inflation adjusted return (index linked gilts), might cost £113K of present day money to buy. Yielding 12K/year inflation adjusted for ten years, after which perhaps you might have a 12K/year pension kick in. Amounts above/beyond that 113K cost ... dropped into stocks for growth/accumulation.

The Index Linked Gilts are no different, other than they talk in inflation adjusted terms.

I will try to understand inflation linked better but I think it's perhaps a "know your limits" thing for me.

One question on the bolded part.

I understand there's virtually no chance the UK Government will default.

But my understanding was also that there isn't protection there in that technically they could default?

[mc2fool]

Others will be able to comment on IL gilts better than I can. The big picture though is that they behave in a kind of halfway between equities and conventional gilts.

I'm not sure that's a good characterisation, at all!

The easy way to think of indexed linked gilts is exactly as conventional gilts but in real vs nominal terms.

To take the example of conventional gilt TN28, maturing 31-Jan-2028 and at a current price of 82.31, vs index linked gilt T28, maturing 10-Aug-2028 and at a current (un-indexed) price of 95.97 (and for simplicity ignoring the 0.125% coupons on both).

For each £100 you spend on TN28 now you will get a nominal 100/0.8231 = £121.49 in 2028, but that will most likely buy you fewer cans of beans then than £121.49 would now, due to inflation.

For each £100 you spend on T28 now you will get a real 100/0.9597 = £104.12 in 2028, which has been uplifted by the change in RPI and that will buy you the same number of cans of beans then as £104.12 would now (assuming beans go up by RPI!).

Now, which one will buy you more beans in 2028 for your £100 outlay now? I.e. which will have the greater real value in 2028? Well, clearly that depends on inflation. £121.49/£104.12 = 1.167, so if beans go up by more than 16.7% between now and then you'll be better off with the index linker and if they go up by less you'll be better off with the conventional gilt.

However, the "security" of the index linker is that you know it will, for your £100 outlay now, buy you the same amount of beans as £104.12 would now, whereas with the conventional gilt if may buy you more or it may buy you less.

HTH.

[1nvest]

I'd be more inclined to go with the Index Linked Gilt and as such opine its worth understanding them better, at near 1% real no matter what inflation might be that's a safer choice when the intended spend is on a CPI adjusted price measure. 25%+ inflation, you still win. Deflation and you may lose in nominal terms, however so also had general prices declined (still buys more). And the Treasury will go all out to avoid deflation. With a conventional Gilt, if inflation hits 25%+, your capital is losing out heavily in real terms. They're near as the same on the tax efficient front also.

Another benefit in addition to tax efficiencies, is that they're fully protected no matter how much you might 'deposit', unlike banks and the £85,000 protection limits.

Yet another choice is to spread more widely. Instead of 120,000 in one, 12,000 in ten, spread over 10 years. Assuming each was priced to a 1% real then for 12,000 in ten years time you'd be looking to invest 12,000 / 1.01^10 = 10,863 in the ten year to maturity gilt ... etc. For a 12K/year for 10 years ladder 120K inflation adjusted return (index linked gilts), might cost £113K of present day money to buy. Yielding 12K/year inflation adjusted for ten years, after which perhaps you might have a 12K/year pension kick in. Amounts above/beyond that 113K cost ... dropped into stocks for growth/accumulation.

The Index Linked Gilts are no different, other than they talk in inflation adjusted terms.

I will try to understand inflation linked better but I think it's perhaps a "know your limits" thing for me.

One question on the bolded part.

I understand there's virtually no chance the UK Government will default.

But my understanding was also that there isn't protection there in that technically they could default?

Open defaults are punished, the Treasury would have to subsequently pay higher interest rates for decades. Instead they'll increase taxes or print and spend at the topmost level, then they might revise the terms, such as not permitting the capital appreciation to be tax-free, then at the lowest level - default. We're in that first level, but things are improving such that the risk of a second level situation is reducing, but could still occur. The prospects of a third level situation are pretty remote, but not impossible. So strictly yes they could default. In reality defaults occur often, just that they're not called that, instead they're small partial defaults, directed via taxation and inflation (which is just another form of taxation). Each new Pound created/spent in effect devalues all other notes in circulation by a little, is a form of micro-taxation.

It's all a big game really. Consider that the US holds around 8000 tons of gold, that the Treasury who own that, have the Fed as custodian, and where its issued certificates on that gold to the Fed, at $42.2222/ounce, but where the Fed can't claim that gold. What those certificates do is scale up the ammo the Fed has, use those certificates as collateral and at a $2000/ounce market price of gold that's like the Fed having access to 2000 / 42 = 47 times more gold than the Treasury actually owns. As though the US was holding 47 x 8000 = 376,000 tons of gold, more than all of the actual physical gold available across the world.

So the Fed aligns the dollar to the DXY, (US dollar index, dollar versus a basket of other currencies), and can trade gold to direct the price of gold into alignment with the dollar, and you have a international trade currency (US dollar) that is stable, open/accessible, accepted. At least it was until they weaponised it by sanctioning Russia.

The UK has little of its own gold, but is custodian to around 5000 tons. When gold was used instead of dollars for international trade settlements London was the global hub, bars of gold were moved between cages (each country having its own caged gold). The US and UK are resilient to repatriating gold as not doing so keeps the financial markets more stable. If others pushed for 'their' gold to be repatriated the UK could ban gold exports from the UK, compulsory purchase all gold within the UK, at a price it set, similar to what the US did in 1934, that 5000 tons would then become UK's gold. Could happen, not beyond the realms of impossibility. But most unlikely to happen. At those sorts of levels many other bad things would likely be occurring both socially and economically.

[Aminatidi]

Thank you that makes sense

My understanding was that as you say technically possible but if it happened we'd have much bigger things to worry about.

Appreciate this one is probably guesswork as in theory the market has priced it in but putting aside the index linked question would anyone have particular concerns about TN25 T26 and TN28?

Also is there a particular reason there doesn't seem to be a single low coupon gilt maturing in 2027?

[1nvest]

A factor to consider is that tax efficient low coupon (0.125%) Gilts may very well become a thing of the past. Are a reflection of low/negative real yields evident at the time of issue. In more 'normal' times newly issued Gilts might offer more in the range 2% to 5% yields. The spread of low 0.125%'ers is a consequence of having 0% type interest rates for a range of years. Historically that has enabled a period of great tax efficiencies, otherwise not previously seen (most of total returns via tax free price appreciation, little of total returns via taxable interest payments).

The UK index linked gilt market is quite shallow, relatively few offerings compared to the likes of the US, you just have to make do and for a ladder where you might prefer one bond maturing each six months or so, instead in some cases you have to combine several rungs into a single bond, perhaps 3 years separation from the prior/next maturing bond.

Boils down to the debt management office who decide when and how much of bonds to issue and at what maturity dates/rates of interest. Driven by maturing bonds (do they roll the payout of a maturing bond with the proceeds of selling a new bond, or finance the repayment of the maturing bond out of the current account (surplus)) and how much the Treasury needs to borrow or not. New bonds are issued via auction, so they have to level new issues at rates that attract buyers, who decide whether that is a acceptable or not offer based on circumstances at the time (interest rates, inflation ...etc.).

[1nvest]

Less relevant for the shorter term, but a factor to consider for mid/longer term is that CPI/RPI tends to inflate slower than other assets, in effect discounts productivity. A single machine might replace armies of workers, helping to slow consumer prices inflation. Population expansion and increased wealth/living standards in contrast tends to drive house, stock, gold prices up faster than CPI/RPI. More surplus capital, increased demand.

1850 to 1920 UK and mathematically average house prices declined, however average house sizes also declined. Former large properties were split up into multiple occupancies, such that the average home might have cost just a quarter of the prior average home value, made the figures look bad, whereas for the average home owner there was little change, other than average home sizes having become smaller.

Bonds linked to RPI (or CPI) only liability match future items that on average rose in alignment with CPI/RPI. But may very well lag house, stock, gold price inflation rates.

In the absence of a stock market, a reasonable asset allocation might be a third in each of a home/house (your primary home is CGT exempt, imputed rent, the rent you;d otherwise have to find/pay isn't taxed (at least not directly), gold legal tender coins aren't taxed). And then set your inflation rate to thirds each house prices, gold, CPI (or RPI). Historically you could have drawn 2% of that total wealth as a SWR (2% initial amount of the total value, where that amount is uplifted by inflation each year as the amount drawn in subsequent years), and also yielded a 1.3% imputed rent benefit (4%, third weighted). Combined 3.33% such that after 30 years you'd had your 'money back'. And tended to end 30 years with a decent amount still left over, half to all of your original inflation adjusted start date wealth.

When half of your money has been returned midway through 30 years, that's your average capital at risk. All at risk at the start, half returned halfway through, all returned after 30 years, average 50% capital at risk. If you have all of your money returned via yearly instalments, and end with all of your money still available at the end of 30 years, relative to half of your money on average at risk, in real terms, then the calculation

( 2 / 0.5 )^(1/30) - 1 = 4.275% real, somewhat like a inflation bond that paid a 4.725% real rate of return.

Unfortunately things aren't as smooth/consistent as that however. For some they'll do better, much better in some cases, and at the other end of the scale others will do worse, much worse for some. The UK pretty much defaulted in the 1970's, saw prices collapse, which has enabled great gains from the 1980's up to 1999. Investors tend to look back at those 1980 - 1999 years and anticipate those rewards will be reflected into the future, when it could be the total opposite (worst case). Those larger waves are more a case of just being down to luck, whether your investment period aligned with a good or bad cycle/phase. if you're young/accumulating over a period of a down cycle, cheaper prices, spending/drawing down over a good period, then you were one of the lucky ones whose investment lifetime aligned to a good/great case outcome. Others will see the complete opposite, had it tough when accumulating and where the cycle flipped to make it tough during their drawdown years.

Fortunately not all countries see their cycles align. So as part of investing you may do better if you align accumulation into a country/region where its in negative phase, draw down from a country that's in a positive phase. I'd guess that the UK is entering a phase that is more favourable for those in drawdown (averaging out), relatively low recent prices. The US in contrast seems relatively high, is better suited to those in accumulation (averaging in). But that is a guess. As ever out-guess and you do well, under-guess and you suffer.

[monabri]

Just to add I don't feel I understand index linked enough to go there.

I'd be more inclined to go with the Index Linked Gilt and as such opine its worth understanding them better, .

I'd agree with 1nvest and would suggest spending a little time researching/understanding the Index Linked version. I reckon your current knowledge of Gilts stands you in good stead to do this and it'd be a logical step.

I'd recommend a read through this recent discussion (if you haven't seen it.)

viewtopic.php?p=604783#p604783

[1nvest]

I'd be more inclined to go with the Index Linked Gilt and as such opine its worth understanding them better, .

I'd agree with 1nvest and would suggest spending a little time researching/understanding the Index Linked version. I reckon your current knowledge of Gilts stands you in good stead to do this and it'd be a logical step.

I'd recommend a read through this recent discussion (if you haven't seen it.)

viewtopic.php?p=604783#p604783

For the average layman, such as me, the difference between the total returns from index linked and conventional gilts total returns are inclined to be similar. In the absence of deflation, that the state will go all out to avoid, the risk is lower with the index linked gilts, as that totally aligns with inflation. For that greater safety your total return is inclined to be a little less, but its generally worth that 'insurance' cost. For tax efficiencies, lower coupon yields are preferable to higher coupon, but again total returns will be less in reflection of those tax savings.

When it comes to actually buying, decide an amount you want to invest, don't bother with trying to calculate the number of bonds, and just throw that as a market order to the broker/market-maker. I'd like as near as £50,000 worth of xzy as you can get please - or whatever.

To figure a reasonable amount to invest in a rung (single gilt), with low coupon yield bonds again you can simplify to a approximation of discounting the indicated real yield back to present day money. I'd like £10,000 inflation adjusted money from a maturing bond in twenty years time, and its priced to a 1% real yield, so I need to invest 10000 / 1.01^20 = £8195 in that bond today. Some interest will have to be paid to the seller, so I'll throw a buy £8500 worth at the broker for that.

Imprecise, but likely to be good enough.

[1nvest]

Again from a longer term strategy perspective, say you had a (grand) daughter that was turning 21, as a gift you could buy the TR65 index linked gilt that's recently priced to around a 1% real with a £100,000 inflation adjusted maturity target value and drop 100000 / 1.01^42 = approx £66,000 into that. Additionally set up a global stock accumulation fund alongside that and drop £34,000 into that within a ISA/SIPP, and have it automatically add the interest payments paid by the Gilts into that stock fund each time as and when the gilt interest value had accumulated to say £1000 value.

Left as is for the 42 odd years then when she was in her early 60's, and along with having paid in to be entitled to the state pension, she'd likely be OK for her retirement. Even more so if she ran her own SIPP alongside that. If she struggled during her working years, didn't have enough to contribute towards her pension, then at least (grand) dad had helped in that respect as a fallback. Might typically end with around a £350K type combined value in real terms assuming stock total returns grew at 5% real type historic rates.

Some might suggest just a all-stock alternative instead, that might grow £100K to £750K real assuming the same 5% real growth rate. However it could be that bonds might be bought for a bit more than 1% real, as might stocks lag 5% real, such that the difference narrowed down. And where a sizeable chunk in government bonds was safer against possible failure/default (much can happen over 40 years). Starting with £34K in stocks and averaging in more over time can yield a better outcome than lumping in £100K at a single point in time.

Fundamentally you might run a gilt holding alongside other investments. A gilt ladder will be all spent as the last bond is sold/spent. Other assets added alongside that ladder help negate risks associated with all-bonds-spent. Some might like to secure a liability matched (inflation adjusted) income, on a year by year measure. Maybe requiring £20K/year for five years, until a occupational pension kicks in, a further £10K/year for another five years beyond that before a state pension starts, and then maybe nothing beyond that. Being 'Fixed income' you can calculate things with a high degree of precision. Or in absence of ability to do the precise calculations can still end up in the same ball-park region.

[GoSeigen]

Quick question on YTM which I think I understand but not entirely sure.

Is this number "safe" to use for compounding calculations?

Yes. There are subtleties but compounding YTM is good enough for most purposes.

Two of the subtleties: 1. gilt yields are quoted on a semi-annual basis. 2. In calculating YTM it is assumed that coupons are immediately reinvested at the YTM.


In practice your actual return will differ from the a priori calculated YTM of course.

GS

[Aminatidi]

Thanks all very useful

Respectfully I think most of the membership here is perhaps a little older hence the focus on yield and income.

In my case I don't need or want income this is just trying to have cake and eat it i.e. 100% safe no risk guaranteed decent low taxed returns that can sit alongside my tracker and give me the optionality if I needed to to sell some quickly to either reinvest elsewhere or withdraw as cash albeit at a potential loss depending how Mr Market is feeling about gilts on the day.

Given those criteria Is there anything else people would suggest I look at?

[mc2fool]

Thanks all very useful

Respectfully I think most of the membership here is perhaps a little older hence the focus on yield and income.

In my case I don't need or want income this is just trying to have cake and eat it i.e. 100% safe no risk guaranteed decent low taxed returns that can sit alongside my tracker and give me the optionality if I needed to to sell some quickly to either reinvest elsewhere or withdraw as cash albeit at a potential loss depending how Mr Market is feeling about gilts on the day.

Given those criteria Is there anything else people would suggest I look at?

? I'm not sure where you see "the focus on yield and income". Indeed, the discussion in the whole thread is pretty much exclusively about low coupon gilts so there's very little "income" to talk of.

"Yield" is one of the main measures of expected returns for gilts but there are two types of yield related to them; there's "running" yield, which is how much (%age wise) the gilt will pay out to you each year (that's "income"), and there's "yield to maturity", aka "redemption yield", which is the annualised total return you'll get, and that's what the thread has been focussing on.

[Aminatidi]

Forum as a whole

Emergency fund is in the bank right now but may go into Premium Bonds or a high interest bank account.

I'm clinging onto my NS&I index linked certificates for dear life until the next renewal date.

My ISA is maxed out and I don't want to use a SIPP as I want the optionality of being able to access the money worst case.

Tax isn't the be all and end all but I can't see a more tax efficient vehicle without doing something that would be the tail wagging the dog.

[mc2fool]

Forum as a whole

Nah, just one small and marginal but, um, hyperactive corner.

Emergency fund is in the bank right now but may go into Premium Bonds or a high interest bank account.

I'm clinging onto my NS&I index linked certificates for dear life until the next renewal date.

My ISA is maxed out and I don't want to use a SIPP as I want the optionality of being able to access the money worst case.

Tax isn't the be all and end all but I can't see a more tax efficient vehicle without doing something that would be the tail wagging the dog.

Sounds like you've got it covered, and if there is anything else that fits your "have cake and eat it" requirements I'd like to hear about it too.

[Lootman]

Tax isn't the be all and end all but I can't see a more tax efficient vehicle without doing something that would be the tail wagging the dog.

Sounds like you've got it covered, and if there is anything else that fits your "have cake and eat it" requirements I'd like to hear about it too.

Depends on the amount. For a very large amount, say ten million, you could stick the lot in a 0.125% gilt and, despite earning about £500,000 annually in gains and interest, you might pay no tax. The interest at about £12,500 a year is within the personal and savings allowances. And the gains are CGT-free. I am not sure you would even have to submit a tax return.

I cannot think of another way of achieving that. Put the lot in Berkshire Hathaway (if you do not need income) and sell up to the CGT allowance annually perhaps?

That said, there are downsides:

1) The opportunity cost of not being in equities or other securities that can grow organically rather than just accrete at a predetermined rate.

2) The 100% exposure to sterling.

3) Reinvestment risk, if rates drop and gilts are trading back above par when your current holding matures.

[1nvest]

Sounds like you've got it covered, and if there is anything else that fits your "have cake and eat it" requirements I'd like to hear about it too.

Depends on the amount. For a very large amount, say ten million, you could stick the lot in a 0.125% gilt and, despite earning about £500,000 annually in gains and interest, you might pay no tax. The interest at about £12,500 a year is within the personal and savings allowances. And the gains are CGT-free. I am not sure you would even have to submit a tax return.

I cannot think of another way of achieving that. Put the lot in Berkshire Hathaway (if you do not need income) and sell up to the CGT allowance annually perhaps?

That said, there are downsides:

1) The opportunity cost of not being in equities or other securities that can grow organically rather than just accrete at a predetermined rate.

2) The 100% exposure to sterling.

3) Reinvestment risk, if rates drop and gilts are trading back above par when your current holding matures.

just to mention that with index linked gilts the income rises in nominal terms, the 0.125% is on the inflation adjusted original 100 nominal bond value.

CPI/RPI inflation will tend to lag house, stock, gold inflation rates, CPI (RPI) incorporate productivity gains, lower prices as machines do the work of many. Higher surplus capital/increased demand (population) is inclined to drive house/stock/gold prices higher - ahead of CPI/RPI.

Some prefer to shift bond risk over to the stock side, Larry Swedroe for instance proposes something like 33/67 small cap value/bonds instead of 50/50 total stock market/bonds, where SCV is seen as being higher volatility/risk, higher reward, so less is needed. Zvi Bodie scales that even further, suggesting 10% in 10x leveraged Traded Options instead of stock.

Stocks might broadly yield a price that rises with inflation, and pay a dividend similar to cash deposits and where that also rises with inflation. Stocks could be considered a 2i (twice inflation) asset. Gold a 1i, cash deposits a 1i, hard cash a 0i. Someone holding a third each in stocks, gold and cash ... is in effect holding a 1i investment. Might reasonably anticipate a 3.33% 30 year SWR (3.33% of the initial portfolio value drawn as income in the first year, where that amount is uplifted by inflation as the amount drawn in subsequent years). The return of their inflation adjusted money via 30 yearly instalments. And where the gold and hard cash, perhaps US dollars, are stored in their safe/wherever, no counter-party risk, no footprints.

Applying Zvi Bodie's approach to that, 3.33% in 10x stocks (Options), 30% in Index Linked Gilts (to cover the time value of the Options, 33% in US dollars, 33% in gold.

Or maybe US dollars - invested in US stocks, hard Pound currency, gold. Mostly that was a 'inflation bond', supported 30 years of 3.33% SWR, not always, in many cases better ...



In the cases of when it did fail to return all of your inflation adjusted money, the hard Pounds that lost out to inflation could have been deposited/invested at some pretty high rates of return (high interest rates)

The same, but where instead of a third in hard Pounds those were deposited into T-Bills during the 1970's and 1980's period when interest rates spiked into double digit levels ...



In many cases there was a decent residual amount left over. If you're drawing 3.33% and the portfolio is sourcing/supporting a 4.3% SWR, then that's like saving 1%/year, such that after 30 years there's 30% of the inflation adjusted start date portfolio still left (a bit more when compounded).

For a mostly have-cake-and-eat-it, you could have got close by accepting a slightly lower SWR, 3% instead of 3.33%, so 90% return of your money over 30 years, and deposited the hard Pounds into short term Gilts (T-Bills) ... that mostly left a residual of around 100% of the inflation adjusted start date amount still available at the end of 30 years



but sometimes less (half) sometimes more (double).

But again that is all relative to RPI, which lagged house, stock and gold price appreciation/inflation.

As a sideline you might see how US sanctions against Russia are relatively ineffective. For stocks they'll hold direct interest businesses, in Africa or domestically owned oil/gas/commodity fields. Along with hard US dollars and gold, that they'll ship/fly around in private yachts/jets. As soon as any one country looks like they might impound - the gold/cash/art will have been moved out of that realm. The state(s) know that, however its a great excuse for the state to open up exposure of all of its citizens assets/wealth/transactions (monitoring). Paramount to confiscation (when others know where your wealth is, it is no longer yours - but a loan, open to being called in either fully or partially at any time).

[1nvest]

Holding a index linked gilt fund was pretty uncomfortable in 2022, INXG declined nearly -35%

A ladder of Gilts when each rung is held until maturity has a fixed/known outcome, however if you mark to market, the ongoing collective value of ladder might at times induce some fear/concern. Holding shorter term Gilts and the price volatility tends to be very low, as its not long before the bond matures at its 100 value, so the market price will tend to converge towards that.


Thirds each INXG/World Stock/Gold since 1983 provided 7.3% annualised nominal, 4% real (log linear regression (trend) lines).