crashmonitor Posted January 3, 2015 Share Posted January 3, 2015 (edited) http://www.telegraph.co.uk/finance/economics/11322680/Europes-bond-yields-fall-to-lowest-since-the-Black-Death.html Edited January 3, 2015 by crashmonitor Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted January 3, 2015 Share Posted January 3, 2015 AEP right? Quote Link to comment Share on other sites More sharing options...
gf3 Posted January 3, 2015 Share Posted January 3, 2015 I don't understand how bond yields can go lower than savings rates. Surely the only way to profit is through greater fool theory. Quote Link to comment Share on other sites More sharing options...
A.steve Posted January 3, 2015 Share Posted January 3, 2015 I don't understand how bond yields can go lower than savings rates. Surely the only way to profit is through greater fool theory. I imagine that, for some institutional investors, guarantees (allegedly promoting safety) require a proportion of funds to be in "ultra-safe" bonds, and on a scale that can drive loony prices. If you think of the negative yield as being an exit-fee from a riskier, higher-yielding, investment... it still makes sense. One has to remember that the bulk of investment is not done by individuals - institutions aren't fully protected by the FCSA's £85k-cap insurance. Quote Link to comment Share on other sites More sharing options...
Ah-so Posted January 3, 2015 Share Posted January 3, 2015 I don't understand how bond yields can go lower than savings rates. Surely the only way to profit is through greater fool theory. A bond yield is a saving rate as well as a borrowing rate. It is the savings rate for savers who want the lowest possible default risk (if investing in government bonds). Quote Link to comment Share on other sites More sharing options...
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