Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • Dick Young’s Safe America
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup

Why Not Invest at Negative Interest Rates?

September 26, 2019 By Dick Young

By Onypix @ Shutterstock.com

Would you pay someone else to take your money? If you answered no, good for you. If you answered yes, many investors in European government and even corporate debt feel the same. The Wall Street Journal’s Daniel Kruger reports that investors have been paying European governments and even corporations like LVMH to hold their money by purchasing bonds at negative yields. Kruger writes:

A growing number of investors are paying governments in Europe for the privilege of holding their bonds.

The amount of negative-yielding government bonds outstanding through 2049 has risen 20% this year to about $10 trillion, the highest level since 2016, according to data from Deutsche Bank Securities.

The expanding pool of such bonds—which guarantee that a buyer will receive less in repayment and periodic interest than the buyer paid—highlights how expectations for growth in much of the developed world have deteriorated.

Government debt sold by countries including Germany, Ireland and Sweden are among those with negative yields. Late Monday, German debt maturing in 2024 yielded minus 0.42%, while Irish and Swedish bonds of the same maturity traded at minus 0.15% and minus 0.32%, respectively.

Corporate bonds issued by LVMH Moët Hennessy Louis Vuitton SE maturing in 2021 also traded at negative yields, according to data from FactSet.

Europe’s growth problems are evident in two of its largest economies. In Germany, where growth has stalled, officials plan on running a budget surplus rather than stimulating growth by running a budget deficit.

Read more here.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Once Hailed as a Panacea, Negative Rates Getting a Skeptical Second Look
  • Here’s How to Explain Negative Interest Rates to Your Spouse
  • “Lower Rates Aren’t Working”
  • Author
  • Recent Posts
Dick Young
Richard C. Young is the editor of Young's World Money Forecast, and a contributing editor to both Richardcyoung.com and Youngresearch.com.
Latest posts by Dick Young (see all)
  • PRICES SOAR: Diesel Shortage Could Cripple America’s Economy - May 13, 2022
  • Young’s Retirement Compounders Clearly Dominate! - April 26, 2022
  • The Magic of Compound Interest - April 5, 2022

Search Young Research

Most Popular

  • MARKET CHAOS: This May Take Time, Here’s How to Prepare
  • MARKET TURNING: Canada's Housing Market Turmoil
  • Your Survival Guy: “Sell in May, Buy After Labor Day?”
  • PRICES SOAR: Diesel Shortage Could Cripple America's Economy
  • The Power of a Compound Interest Table
  • All-Powerful Money Managers Voting YOUR Money Targeted by Senate GOP
  • BULLWHIPPED? Inventory Overhang Could Slow Growth in Certain Sectors
  • BUY THE DIPS? Can You Catch a Ginsu Knife?
  • Institutional Investors Fall in Love with Oil, Again
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Harvard Professor Calls Homeschooling a “Threat to Society”
  • Biden IGNORES Americans’ Pain at the Pump, Touts “Green Transition”
  • The Virtue of Trump Supporters vs. Antifa and ESG Investing is Like This…
  • Why Does Joe Biden Put Americans Last?
  • PRIMARIES: Watch GOP Voter Turnout Tonight
  • The Supreme Court Must Always Protect the Constitution
  • Our Daily Bread Threatened?
  • Watch Out for Your Worst Enemy
  • Farmer Tells Steve Bannon Biden’s Inflation Is Ruining His Business
  • PARTY’S OVER JOE: Republicans Crush Democrats in Local Elections

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Copyright © 2022 | Terms & Conditions

 

Loading Comments...
 

    loading Cancel
    Post was not sent - check your email addresses!
    Email check failed, please try again
    Sorry, your blog cannot share posts by email.