Jun 23, 2019
There are now over $12.5 Trillion dollars outstanding of negative yielding bonds. That’s right, theoretically you are paying some country to lend them money. In reality you don’t write a check twice a year. The idea of a negative yielding bond may not make much sense. Derek Moore will explain how negative yielding bonds work and how much more sensitive (and therefore risk) they are to changes in interest rates. Plus explain how the time value of money is thrown off by these low or negative rates.
How can a bond’s yield be negative?
Why would someone buy a bond that has a negative interest rate?
How a bonds price being above par might make the yield to maturity negative
Does someone really have to write a check to a government if they buy a negative yielding bond?
What is the modified duration of a negative yielding bond?
Why the time value of money is thrown out off by using a negative or zero discount rate
What the after inflation yield or return would be accounting for inflation
How alternative income strategies utilizing option premium selling might be an alternative strategy
Challenges low or negative bond yields present to investors
Is Greece’s 7-year bond yield really lower than the US 7 Year Treasury Bond yield?
Mentioned in this Episode:
Contact Derek www.razorwealth.com
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547