There are different types of Investment Opportunities open to investors in the UK. One way to invest with the intention to generate income would be to look at high-yield corporate bonds or similar debt instruments.
This type of investment pays a return called a coupon and is normally payable at a regular interval throughout the term of the Bond but can in some cases be rolled up until the end of the investment and paid when the bond matures. These bonds are normally for a fixed period so the amount of return is normally known at the outset of the Bond, this can be particularly useful for clients looking for their assets to produce an income upon which they can rely. In addition, at the end of the term—provided that the company is still in existence and can pay it—the initial capital is also returned to the investor. This makes corporate bonds a safer investment generally than shares in these same companies.
These and other investment opportunities in the UK can be found by using an Investment Intermediary such as AMYMA who put investors in touch with potential investments.
When buying bonds, investors loan their money for a period of time to a corporation or the government. The borrower agrees to pay interest for a specific time frame and when the bond reaches its maturity period (this can be different for different types of bonds), then the initial capital is returned to the lender. This way the yield of a bond can be a standard retirement income or retirements savings.
Bonds have quality ratings and this way potential investors can look for the most profitable investment opportunities in the UK. Some bonds have adjustable interest rates (floating rate bonds), while very high-yield bonds tend to have a lower quality rating.
How to purchase bonds
Bonds are among the best investment opportunities in the UK and can be purchased either on their own or as a fund. Retired investors can use a multitude of bonds to create a ‘bond ladder’ with different maturity dates. This will ensure that their future cash flow will be secured. This arrangement is also known as time-segmentation.
The principal value of bonds will change as interest rates change. If the interest rate rises due to inflation, existing bond values will be negatively affected. However, bonds that reach maturity are not that much affected by fluctuations. If an investor though owns a bond mutual fund and has to sell it to cover living expenses, then changes negative changes in the interest rises will matter.