Why buy negative yielding bonds? | FT

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[federicacocco]

Hello! To everyone asking why investors aren't just holding the cash instead of investing the money. This is touched on in the video: prices can still rise for a negative-yielding bond. This price appreciation provides insurance when risk assets are slumping. Hope that helps!

[pedrocaetano]

Quite a good video on the topic. Though, insurance companies don't buy bonds only due to liquidity... It's mandatory under the Regulated Covered Bonds FCA's act. They have no choice and that's where the negative yield trap is.

[TheWhippinpost]

The sound effects get in the way of the message

[sandwitht]

in short: to keep portion of the investor’s portfolio liquid

[naren_legha]

My takeway from video: we live in a topsy turvy world. 🌏⬇️

[ManuelBTC]

The key question that was missed here: Why not just hold cash?

[BjornFord-ov]

I'm no longer confident in my investment strategy due to the impending recession. I aim to reallocate my $450K portfolio. What's the most effective strategy to do it right?

[williamsignet]

I don't think you ever answered the question why negative-yielding bonds are purchased at all, which is the title of the video. You do mention several times that it is "a topsy turvy world out there." I read the FT every day; can't believe they produced this video.

[stGruhn]

This has already shown itself to be a bad strategy. QE and negative rates have only flushed the market with cash and is the main reason that stock prices relative to actual earnings have inflated so much. When the US fed started to increase rates AND reverse QE the market tanked and the market reversed when they halted. The next recession will leave them with little to no room to move aside from letting the printing presses fly and inflation will skyrocket.

[AudatiousAilbz]

I am studying R01 and this was helpful even though I had to repeat sections of the video a few times.

[loladobler]

Best explainer on the topic I’ve seen so far thank u!

[Sjalabais]

Decently informative video, but please go easy on the sound effects. Basic rule of editing: Just because you can doesn't mean you should.

[starless]

2:02 about quantitative easing, does it in fact dilute purchasing power of existing money? Is it a way to compel people to spend now with the spectre of money being worth less in the future?

[dune]

The SEPM (Sound-Effects per Minute) is over 9000!

[okunrin]

I can say, at least, I learnt the meaning of TOPSY TURVY WORLD!
I’ll go back to work just repeating it while staring at colleagues.

[lockbert]

Bank deposits probably can't be used as loan collateral, but they seem to meet the liquidity part.

[zaga]

Thank you for sharing the video. I learnt the different betweeen bonds and yields. But I am still consfused, like many other viewers (judging by their comments), about the reasons to hold bonds against cash in a negative yield scenario.

[nachannachle]

Because a guaranteed -0.15% return on a bonds will always be a much better deal than an unpredictable double digit percentage of inflation on cash. Simple mathematics.

[KevGoesRiding]

I can't understand this because underpinning all the assumptions is that the value of cash is not going down the toilet. QE and zero interest rates are effectively destroying the entire concept of fiat currency and all 'assets' which pay out government printed money...like bonds. This is a ticking time bomb and it will be very ugly when it explodes

[gabbarngh]

In negative yield bonds you are basically giving money to make sure your money doesn't devalue too much due to inflation.