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Russian Bonds - Safe to buy ?

Igor
Igor123472
Aug 10 2014 at 06:49
117 posts
TheFX4You posted:
Stay away from dealing with Russian currency bonds or whatever, it's the best solution for now.
Totally unsafe...


why @TheFX4You ? what did make you think about ?

ArdiFX (ahuruglica)
Aug 11 2014 at 13:58
852 posts
Igor123472 posted:

Hi everyone,

I was just checking government bonds to invest in.
Russia has one of the most higher yield curve of Bonds of the world.

Look the attached image.

Is it safe for one Investor to invest , i don't know... 1 million USD in Russian Bonds 1Month to withdraw 9.53% of profit?
In a way, the period of time is profitable.

In one single month is a huge profit.

Traders , explain to me if is worthful! 😁



Igor yield is yearly, not monthly. You will not het a huge profit but 1/12 of that. Not 9.73% but 0.79%.


You have to be careful before investing 1M.

Igor
Igor123472
Aug 11 2014 at 14:43
117 posts
ahuruglica posted:
Igor123472 posted:

Hi everyone,

I was just checking government bonds to invest in.
Russia has one of the most higher yield curve of Bonds of the world.

Look the attached image.

Is it safe for one Investor to invest , i don't know... 1 million USD in Russian Bonds 1Month to withdraw 9.53% of profit?
In a way, the period of time is profitable.

In one single month is a huge profit.

Traders , explain to me if is worthful! 😁



Igor yield is yearly, not monthly. You will not het a huge profit but 1/12 of that. Not 9.73% but 0.79%.


You have to be careful before investing 1M.



mhm, interesting... so, i thought that bonds is a safe way to get fixed income.

@ahuruglica , do you think that invest in saving bank deposits worth a try? To profit 18% per year ?



ArdiFX (ahuruglica)
Aug 11 2014 at 15:13
852 posts
I come from a country that 15 years ago was liberated by war. I also belong to banking sector. Even after the war, and with a fragile banking sector, highest term deposit yield was 6.6% and currently are around 1.5%.


Banks increase interest to attract investors, and lower them if there is no need for new funds. It's a free market. I don't know which bank, or which country, but I smell trouble.

TheFX4You
Aug 11 2014 at 17:52
92 posts
Igor123472 posted:
TheFX4You posted:
Stay away from dealing with Russian currency bonds or whatever, it's the best solution for now.
Totally unsafe...


why @TheFX4You ? what did make you think about ?



Have you heard about all this economical sanctions??
It will bring huge affect also to the markets.
 

Stable 20% per month without manual intervention...
FranceFX
Sep 09 2014 at 07:26
136 posts
you can go here and buy treasury bills, bonds or notes directly: https://treasurydirect.gov/

but the idea of having bonds is that you want some diversification of your investments. its not a primordial investment or the only one one should have.

Forex21
Sep 09 2014 at 10:58
416 posts
I am not sure about russian bonds but russian stocks become more and more attractive.

ArdiFX (ahuruglica)
Sep 09 2014 at 16:23
852 posts
Let's set politics aside and talk about risks.

Sometimes for some investors high bond yields are very compelling to invest. But unfortunately, higher yields also means higher risks. Countries that pay high yields means they are having difficulties on finding investors to buy their bonds. There are a lot of risks involved, but in Russian case the risks are clear. It's all about current geo-political uncertainties.
Lets compare some different 1 year bonds high to low: (real data from investing.com

Ukraine 20%
Uganda 11.40%
Turkey 9.05%
Russia 8.52%
....
United Kingdom 0.55%
Switzerland 0.05%
United States 0.09%
France -0.03%
Germany -0.08%

By comparing the table above the investors are requesting Ukraine 20% for their money, from Russia 8.52% while they will pay Germany 0.08% to keep their money. Interest rates are linked to risks, and investors often are ready to pay someone just to keep their money safe (France and Germany on this case).

On the long run, if yields remain high it will become a burden to the country. A lot of tax payer money will go to paying interest. High yields will lead to deflation (the country will be forced to print more money) or even bankruptcy. It was not a long time ago since last Russian bankruptcy, only 15 years ago.

Of course it is not safe to buy Russian bonds. As a matter of fact, there is no safe bet. It's just different levels of risks. There is a golden rule to investing: 'If you want to make money you have to take risks'.

Alex2402
Sep 10 2014 at 06:31
1 posts
It's better yo buy RUB with leverage. You ll have + swap values...

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