Financials Matter

"It's Not Just About Finance"

Nothing Seems Absurd Anymore

When you take a step back and try to look at the investment world objectively, you can’t help but shake your head and say, “Huh!”

I’m referring to last week’s $500 Million French Junk bonds issued at negative 0.026%.

French utility, Veolia Environnement SA, is the perpetrator issuer of these bonds.  Their credit rating is BBB- (Junk Bond status).

So, if you (or unknowingly your pension plan/401k) were one of the lucky ones/sarc that bought these negative yielding garbage bonds, you’ll now have the privilege of paying them to hold your money.

Wait!  What?

Can you say “Sac`re BBB-  bleu?”

Seriously, why would anyone buy junk bonds and pay the issuer to hold their money?

Aren’t you supposed to get a nominal return (even if it’s only 1%) for you taking the risk of buying bonds?

Here’s what’s really scary.  The total amount of negative yielding bonds owned by investors today is approaching $10 Trillion dollars.

Let that sink in for a moment.

This is an investment that guarantees you will lose money.

It’s beyond absurd…Oh Wait!

Judging by the number of investors buying this garbage, nothing seems absurd these days.

Hopefully your 401k doesn’t own any.  But what if they do?

Or, more importantly, what can you do about it?

Last month’s Newsletter, Simplifying Wall Street in Plain English, featured an article showing you What to buy when bond prices are high.

It’s called How to Get a Raise Every Month…and Not Have to Beg for It.

But you must be a Premium Subscriber to have access to it (HERE).



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