Is buying Bonds a good idea in current economic climate?

[ghworker2010]

Theres an interesting video link below where this Brit mentions buying bonds is a good idea. 

 

Towards the end of the interview he gives his reasons why there could be another global recession. 

 

https://www.youtube.com/watch?v=Gks7AM9fXjI

 

At 44min 25sec he says that he thinks everyone should own bonds and that they will go to zero. He strongly asserts that one should buy bonds and I don’t understand his reasons for this. Are you able to explain why he would suggest that this is a good investment opportunity? 

thanks

[Naam]

Quote

At 44min 25sec he says that he thinks everyone should own bonds and that they will go to zero.

he said "all markets will go to zero and lower..." and most probably meant "stocks/shares, etc." inspite of the nonsensical "and lower" he might have a point because interest payment on bonds is not affected by the price of the bond but the financial ability of the debtor who issued the bonds.

[wombat]

don't put money in the bank. buy the bank.

[1FinickyOne]

at any given time there are people forecasting that the markets will crash and others predicting the moon. 

 

 

[Brunolem]

The guy is Raoul Pal, co-founder of Realvision with Grant Williams. 

 

Williams publishes the very entertaining weekly newsletter Things that make you go hmmm... which I read when it was free... now you get it only if you subscribe to Realvision. 

 

Having said that, bonds are already very expensive, having been in a bull market for more than 30 years. 

 

Because they are expensive, bonds pay little, or even negative, interest...even some junk bonds have now entered the fantasy world of negative interest rates... 

 

Thus, buying bonds now is like betting that the bull market will go on and that interest rates will go even lower... which is a distinct possibility in this Alice in Wonderland financial world... 

[tpkhk]

To the OP, if I heard correctly....my 2 cents.

 

- Raoul Pal, the speaker, is saying buy bonds, bull markets will go to zero.  

- If he actually said, buy bonds, bond markets will go to zero, then he just contradicted himself/doesnt make sense.

 

- Almost certain, interest rates will stay flat/or even get cut in all major markets.  Too many reasons for why no place, including here in TH, will attempt to increase rates.

 

- In a decreasing interest rate environment, all bonds that were issued previously tend to rise in price...ie. if you bought a bond paying 7%, 5 years ago, I'd be willing to buy it off you at a higher price each time market interest rates are cut.  

 

- If you are in the bond market, consider currency & issuer risk.  If you are willing to hold to maturity, then price fluctuations dont matter that much.

[tpkhk]

To his point about trading bonds or bond futures.... unrelated but here's a fun read on (gambling) taking advantage of volatility.

https://www.vanityfair.com/news/2019/07/the-mystery-of-the-wall-street-trump-trades

 

 

[Brunolem]

34 minutes ago, tpkhk said:

 

 

- Raoul Pal, the speaker, is saying buy bonds, bull markets will go to zero.  

- If he actually said, buy bonds, bond markets will go to zero, then he just contradicted himself/doesnt make sense.

 

 

What Raoul Pal says is that bond markets are going to zero, and lower... interest rate (these last two words are missing but are added a bit later). 

 

And he is most probably right... just see what is going on with the US central bank. 

 

So there is money to be made with US bonds, not so much with Japanese and European, which are already at insane levels... 

 

[Captain 776]

With stock market roaring at all time highs in history.......STOCKS.......BONDS is what u buy when market is low and volatile

[GreasyFingers]

33 minutes ago, Brunolem said:

What Raoul Pal says is that bond markets are going to zero, and lower... interest rate (these last two words are missing but are added a bit later). 

 

And he is most probably right... just see what is going on with the US central bank. 

 

So there is money to be made with US bonds, not so much with Japanese and European, which are already at insane levels... 

 

Until the bond bull market collapses. I believe you can buy 100 year Argentine bonds cheaply.

[Naam]

7 hours ago, Brunolem said:

Because they are expensive, bonds pay little, or even negative, interest...even some junk bonds have now entered the fantasy world of negative interest rates...

Bruno please have mercy. i beg of you! what crime did i commit that you are torturing me with ridiculous statements?

[Naam]

6 hours ago, GreasyFingers said:

Until the bond bull market collapses. I believe you can buy 100 year Argentine bonds cheaply.

presently you can buy any Argentine bond 'cheaply' although they are recovering from their lows.  here's a chart of the century bond yielding 9.45% p.a.:

 

 

[sawadee1947]

I don't think so. 

I prefer ETFs all world countries 

[madmen]

Why is OP asking for financial advice on TV?  seriously it would be the last place in the world..

[JimmyTheMook]

16 hours ago, kenk24 said:

at any given time there are people forecasting that the markets will crash and others predicting the moon. 

 

 

 

And in other related financial news; it may or may not rain tomorrow.

[1FinickyOne]

16 minutes ago, JimmyTheMook said:

 

And in other related financial news; it may or may not rain tomorrow.

Yes, the price the market is currently at is 50/50 to go higher or lower - - it is called "market price" if more money comes in saying it will go higher, it goes higher... market price... 

[Brunolem]

9 hours ago, Naam said:

Bruno please have mercy. i beg of you! what crime did i commit that you are torturing me with ridiculous statements?

Contradictory facts please... strange how so many members have no idea what a debate is... 

 

In real life, as opposed to virtual life on the internet, one cannot make a point by telling one's opponent that he is wrong... one also need to bring arguments to support one's statement... 

 

[Naam]

9 hours ago, Brunolem said:

Contradictory facts please... strange how so many members have no idea what a debate is... 

 

In real life, as opposed to virtual life on the internet, one cannot make a point by telling one's opponent that he is wrong... one also need to bring arguments to support one's statement... 

 

Quote

Brunolem said:

even some junk bonds have now entered the fantasy world of negative interest rates...

= bull-rubbish² - unfortunately that applies to most of your ridiculous comments grabbed out of thin air which are never presented with any proof.

 

put up a single example where a junk bond was issued with negative interest or shut up. you should be ashamed as this forum is for information!

[Brunolem]

12 hours ago, Naam said:

= bull-rubbish² - unfortunately that applies to most of your ridiculous comments grabbed out of thin air which are never presented with any proof.

 

put up a single example where a junk bond was issued with negative interest or shut up. you should be ashamed as this forum is for information!

Who do you think you are? 

You'd better get down your high horse! 

 

This is from Bloomberg... ever heard of it? 

 

https://wolfstreet.com/2019/07/09/negative-yielding-junk-bonds-have-arrived-in-europe/

[Naam]

1 hour ago, Brunolem said:

Who do you think you are? 

You'd better get down your high horse! 

 

This is from Bloomberg... ever heard of it? 

 

https://wolfstreet.com/2019/07/09/negative-yielding-junk-bonds-have-arrived-in-europe/

this example shows exactly that you possess a wealth of no idea pertaining to the difference of negative yield based on already emitted and trading debt vs. debt to be emitted with a negative yield and just parrot Wolf Richter's well known sensational blog comments (not related to Bloomberg at all!). what Richter is referring to is nothing new but exists since decades.

 

most probably you won't even understand my simple explanation.  

 

Quote

Naam said:

put up a single example where a junk bond was issued with negative interest or shut up.

 

Edited July 13, 2019 by Naam

[Brunolem]

2 hours ago, Naam said:

this example shows exactly that you possess a wealth of no idea pertaining to the difference of negative yield based on already emitted and trading debt vs. debt to be emitted with a negative yield and just parrot Wolf Richter's well known sensational blog comments (not related to Bloomberg at all!). what Richter is referring to is nothing new but exists since decades.

 

most probably you won't even understand my simple explanation.  

 

 

 

In the post you are referring to, I simply wrote that there were junk bonds with negative yields, not going into the details of whether said bonds had been issued with a negative rate, or if the rate had turned negative later... it doesn't matter at all in the context of this thread, except for someone who want to prove by any means that he knows better. 

 

You are surfing the threads on the forum, pompously distributing good and bad marks to others, as if you were THE grandmaster of all things financial...are you Bill Gross hiding behind an avatar? 

 

Generally speaking, persons endowed with great knowledge are much more modest than you, and do not pretend to instruct others by belittling and insulting them. 

 

Credibility starts with humility... 

[Naam]

5 hours ago, Brunolem said:

Credibility starts with humility... 

not when dealing with something that rhymes ending with '-pidity' 

[strikingsunset]

i’ve read all the posts - as usual no one has a first clue - what to do re investments - i’m in the same club


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[BurgerGung]

Hell no! Read a recent article by David Stockman on www.lewrockwell.com

 

Junk bonds with negative yields? Crazy times and the FED propping up the big bubble