Foreign govt bonds

[arnemgreeves]

Is it worth investing in strong foreign state bonds? Do Germany or Canada as generally solvent economies with good credit ratings let foreigners invest?

[+ augustus]

18 hours ago, arnemgreeves said:

Is it worth investing in strong foreign state bonds? Do Germany or Canada as generally solvent economies with good credit ratings let foreigners invest?

Yes.  You can do this through ishares.   They have mutual funds that invest in foreign government bonds.  There's one for German government bonds, another for Canada government bonds, etc.  Since the US dollar is strong right now, it might be a good time to invest in them.  If, when, the US dollar weakens your foreign government bonds will increase in value based on the exchange rate.

Edited October 20, 2022 by augustus

[Guest]

On 10/19/2022 at 9:30 AM, arnemgreeves said:

Is it worth investing in strong foreign state bonds? Do Germany or Canada as generally solvent economies with good credit ratings let foreigners invest?

It’s not apples/apples.  With foreign bonds, you make have a higher implied rate of interest, but you introduce currency risk into the equation.

Another possibility is investing in INSURED US State/Local debt that is in default.   It tends to get “oversold” without consideration of the insurers capacity to cover the debt service.  It’s not for the faint of heart though.  

[Kevin Slater]

1 hour ago, BnaC said:

It’s not apples/apples.  With foreign bonds, you make have a higher implied rate of interest, but you introduce currency risk into the equation.

Another possibility is investing in INSURED US State/Local debt that is in default.   It tends to get “oversold” without consideration of the insurers capacity to cover the debt service.  It’s not for the faint of heart though.  

Although converting today's (expensive) dollars into foreign currency may not be such a bad idea.  There's a good chance that the currency trade would end up working in your favor.

Kevin Slater

[Guest]

8 minutes ago, Kevin Slater said:

Although converting today's (expensive) dollars into foreign currency may not be such a bad idea.  There's a good chance that the currency trade would end up working in your favor.

Kevin Slater

Maybe.  You said “there’s a good chance…”. I said “introducing currency risk.”  “Chance” and “risk” are synonyms.    But since Canada and Germany were mentioned above, let’s compare.  
German 10 yr is at 2.418%, Canadian is at 3.618% and 10YrUST is at 4.22%.

How much “good chance” is needed to bring parity with a 100% probability of 4.22%?

this is not my expertise, so if I’m missing something, I welcome correction.  

[BonVivant]

Why buy foreign bonds when the US treasuries are beating all other developed countries?

Edited October 24, 2022 by BonVivant

[arnemgreeves]

On 10/24/2022 at 4:33 AM, BonVivant said:

Why buy foreign bonds when the US treasuries are beating all other developed countries?

I’m not American