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The Gilt-Edged Market Revisited

Published online by Cambridge University Press:  11 August 2014

J. M. Hamilton
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Extract

An investor who put £1,000 into 2½% Consols at the end of 1947 and reinvested all his gross income in the same stock at the end of each year would at the end of 1970 have stock valued at £921. Adjusted to take account of inflation, in 1947 £'s his investment with all income reinvested is worth £365. Why bother to revisit the gilt-edged market?

An investor who put £1,000 into 2½% Consols at the beginning of January 1971 and reinvested the gross dividends as they were received in the same stock would, by the middle of September 1971, hold stock worth £1,194. He is showing a 19% return on his investment after under ten months. I do not wish to draw the conclusion that we have reached a new dawn in the gilt-edged market. I draw the conclusion that money can still be made in gilts. It is a market worth revisiting.

Type
Research Article
Information
Journal of the Staple Inn Actuarial Society , Volume 20 , Issue 3 , 1973 , pp. 216 - 232
Copyright
Copyright © Institute of Actuaries Students' Society 1973

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References

BIBLIOGRAPHY

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