We like a good debate, and when two opposing views argued about the role of government bonds in a diversified portfolio, a veteran of 30 years in fixed interest stepped in as referee.
Tag Archives | government bonds
Government bonds do not feature in most retail portfolios, but they carry defensive qualities with income to offset the higher risks in other asset allocations. Are they always worth including?
Government bonds produced good returns last year, but at the current starting position of lower rates, the cost of defensiveness is probably a limited payoff.
Bonds have performed well for most of the last 30 years with a tailwind of easing liquidity, but the current high prices makes them vulnerable to losing their protective qualities.
Argentina’s economic history shows there’s no room for complacency, as the markets often lose their ability to judge risks in the wild search for performance.
A sign that the strong credit cycle is ending is the funding of some emerging market governments that are more than likely to default, but demand is driven by desire for yield regardless of risk.
It is widely believed that rising bond yields should be bad for share prices. But is this true in real life? The relationship between government bond yields and the price of shares is more complex than it first seems.
Investing into bonds when you know you will lose money sounds crazy, but aside from interest rates, there’s deflation, economic stability, safety and currency issues to consider.
Infrastructure is sometimes seen as an alternative to low risk defensive assets like cash and bonds. But what are the implications for infrastructure investors of the low level of base or risk free interest rates?
Bonds have the most predictable returns of any asset class, yet they are often maligned and misunderstood by market commentators who call them risky. Follow the 13-year life of this April 2015 bond and decide for yourself.
Despite the wide-spread perception that Australia’s debt position is unsustainable, it’s low in an historical sense and when compared to national income. We could be making more use of it.
Current bond yields and prices haven’t been seen in Australia since the 1890s and 1930s depressions. The market is being supported by foreign buyers and central bank liquidity.
The story of a US hedge fund fighting to recoup its Argentinean bond investment has both stunned and amused all who have followed its progress over the last 12 years. Will the seizing of a naval vessel bring it to a close?
As it became obvious that Australia would need to default on its government debt in the 1930s, the question of whether to prioritise foreign or local debt was put to the people, with surprising results.