Italy's bonds - 7%

[ripvanwinkle]

On my way home tonight I heard Italy's Bond rate was now at 7%. Not knowing much about bonds, I have to ask if someone could buy the bonds and make money?

I remember back in the mid 80's, my mom and dad had some sort of bonds and cd's I think that were paying above 10% and they were giddy about it. ;D

Will investors here buy Italy's bond and make money?

[clarkrl2]

I am not an expert on bonds either but in my opinion 7% on Italian bonds is not worth the risk. According to federalreserve.gov/releases/h15/data.htm U.S. 30 year treasury from 1980 to 1985. I believe this was mostly due to the federal reserve raising rates to flight high inflation. Italian bond rates are high due to the possibility of default. I think a less risky approach would be to try an etf like HYG which has high yield U.S. corporate bonds. I believe the current yield is about 7.25%. In my opinion the risk here is not worth the reward either but I believe it would be less risky than Italian bonds.

[tyfighter3]

Rip, you may want to take a look at WHX, 16% yield. Have to be a Holder buy the Nov 19 to get dividend paid out Nov 29.
money.msn.com/business-news/article.aspx?feed=BW&date=20111104&id=14484786

[ripvanwinkle]

Nov 10, 2011 0:59:17 GMT -5 tyfighter3 said:

Rip, you may want to take a look at WHX, 16% yield. Have to be a Holder buy the Nov 19 to get dividend paid out Nov 29.
money.msn.com/business-news/article.aspx?feed=BW&date=20111104&id=14484786

I just looked at WHX and although Scouter shows a score of 9, Zacks average brokerage recommendation is Strong Sell. Doesn't sound good to me.

But I know zero about how bonds work.

[tyfighter3]

They have had a strong sell on it since it first came out. It all depends on the price of oil. If you think oil will go down to 50 then don't invest but if it stays over 70 then it should be fine. I started to buy it around 10 and a year latter sold my original investment at 21 and kept the profit and dividends in the Trust. Anytime you look at a high yield you look at risk.

[The Virginian]

I have sold any funds that hold any type of bonds. I only had them because the "experts" always say bonds should be part of your portfolio. I have decided the experts are wrong. No Bond Funds for me!

I'm not an expert and I'm sure if you are there's plenty of money to be made if you are but I'm not taking any chances!

[bimetalaupt]

Jan 31, 2012 10:55:41 GMT -5 The Virginian said:

I have sold any funds that hold any type of bonds. I only had them because the "experts" always say bonds should be part of your portfolio. I have decided the experts are wrong. No Bond Funds for me!

I'm not an expert and I'm sure if you are there's plenty of money to be made if you are but I'm not taking any chances!

Mr. V.,
It is like dumb to pay someone 1% of your assets to hold bonds..esp when they pay about one percent for the five year and 1.8% for the 10 year bond.. You can buy them direct for zero fees.

How long will it before the Bond rate again hits inflation rate.. Not sure but you know it will. Current bond prices for the 30 year T-Bond have priced in only a 1% inflation.. If you believe that I have some Ocean Front Property in Arizona I will make you a great deal on.

I have always viewed Bonds as a trading partner with Stocks.. Better return then Cash and you can use them for 90% cash to short the market.

as far as high risk bonds... Well it is going to be 70%.. From 21% last Feb to 70% :(today..Well they every get the 30% reduced rates...ECB did not participate in the bond as they are not Private.. Here is the problem two class of bond holders treated unequal.. Bets are not there will not be enough money to pay the 30% and the Greek will not want to work hard and stop working..... This is like a crew cut.. Scalping!!! The investors!!!!
Just a thought,
BiMetalAuPt

[The Virginian]

That's kind of the way I was thinking Bi-Metal. I didn't make anything on them last year. I am going to replace most of them with Dividend paying stocks. Do what I know best!

[bimetalaupt]

Jan 31, 2012 18:08:07 GMT -5 The Virginian said:

That's kind of the way I was thinking Bi-Metal. I didn't make anything on them last year. I am going to replace most of them with Dividend paying stocks. Do what I know best!

Mr. V.,
How did you do that.. All T-Bond were up year over year.. It is the change in interest rates that will make or lose you money...But My second largest holding is DUK!!! Yes, I love the income..T-Bond I hold are old and the 30 year bonds pay ufp to 8%..2020 I recall!!

[The Virginian]

Poor timing on my part I guess. Anyway it freed up money for some great stocks!