The paranoia of buying bonds below par

Family and friends came over to our place over the fun filled carnival weekend. The children were enthusiastic, playing and speaking about their costumes whilst the grownups gathered around the dining room table for some tea and biscuits, an ideal setup to unwind and try and catch up on each other's lives. My uncle sat next to me at table and, conscious about the current volatility and challenges being faced within financial markets, a discussion ensued.

Being a seasoned local investor, I knew my uncle could keep up with the discussion as we delved deeper into the nitty gritties of the impact central banks have had on keeping bond prices supported as well as the challenges weakness in emerging markets is having on the global economy.

The conversation swiftly shifted to whether there are any market opportunities in Europe in all this turmoil and if valuations appear attractive, to which I replied that the key for 2016 is focusing on bond picking and not to expect much upside capital appreciation, but merely coupon like returns.

There are some solid European names, bearing sizable coupons I added which are not heavily exposed to emerging markets and could provide some form...