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My initiation into the bond market was in the mid 80s at a very junior level as a London Stock Exchange clerk. I stood by one of the gilt jobber’s pitches whilst a very serious man in a pin-striped suit fired off a rapid string of coupons, maturity dates and prices denominated in complex fractions. It was a process seemingly designed to exclude the ordinary investor. By the early 90s I found myself still dealing in bonds, this time on the Euromarkets and in a wider range of currencies. Again, the industry was an exclusive club, trading huge blocks between financial institutions.

It struck me as strange that whilst I, and indeed many of my colleagues, made their living by selling and buying these instruments, most of us had never personally owned a bond. This was in considerable contrast to the frantic personal account dealing seen in the equity departments of most banks and brokerages. So I decided to give it a go, and by the mid 90s I was dipping my toe into the world of bonds with my modest savings. I soon discovered that investing your own money was a very different game to advising treasurers or fund managers – but more of that later.

The turn of the millennium saw me move into the world of independent research. Here I was able to pick up on the subject of bonds and the private investor in more detail, launching the www.fixedincomeinvestor.co.uk website and advising directly on a range of bond portfolios. It was a good time to be in the bond markets, which continued to outperform the turbulent equity markets of that decade.

Timing, of course, is everything. When I was investing in bonds back in the late 1990s there was an underlying bull market in the asset class, combined with enough volatility to make investing interesting; at times very interesting! But a reader today may ask: is now the time to be involved in bonds? I would suggest that, yes, it is.

Indeed, any serious investor should always be involved in bonds to some degree if he or she is to maintain a balanced portfolio. There are other, more immediate reasons to be involved in investing in bonds. The ultra-low interest rates that central banks have put in place look set to hold force until the middle of this decade, and income seekers are hard pressed to find returns. Whilst yields may be low on gilts, corporate bonds provide more substantial coupons. Sensible returns are available from respectable issuers and risks for investors lower than the equity market.

There are other practical reasons to get involved in bonds. The rapid growth of low-cost ISA and SIPP accounts has meant that every person can have their own personal tax shelter. Investors can keep and, importantly, re-invest, the interest they receive from bonds. Finally, the growth of the LSE ORB market has meant greatly improved access for private investors in the bond markets, a move that has been strongly supported by the UK’s private client brokers and wealth managers.

This book aims to help the average investor find his way into the bond market. I sincerely hope that bonds will soon become a permanent feature in your portfolio.

Mark Glowrey