Bonds over valued

blinko

Bonds over valued - given equities are yielding 5% odd divi's and bonds say fixed 4%

are we enterig a bubble here

infact a good example japanese debt yields 1% yet people are still buying it up......

anyone got any thoughts

LongTermLurker

infact a good example japanese debt yields 1% yet people are still buying it up......

HL have been pushing Jap funds for a while...

Sceptic001

Japanese inflation is currently -0.9%, so 1% interest rate looks quite good...

Reaper

I think they are overpriced, but I thought that a year ago and they have done very nicely since so that just goes to show you shouldn't listen to me.

I think it depends whether you think there will be a double dip recession. If so fixed interest bonds will continue to do well.

However if you think inflation lies ahead sitting in a poor yielding fixed interest bond would be very unwise.

blinko

but isnt that the point they are stuck in deflation,

who in real terms would buy a bond yielding 1% ! from a country that is stuck in deflation with interest rates at zero !

lvader

blinko wrote: »

who in real terms would buy a bond yielding 1% ! from a country that is stuck in deflation with interest rates at zero !

Deflation only affects them locally, the Yen keeps increasing in value so a British person investing in Japanese bonds would have done very well!