Have bond investors gone completely crazy?

Government bond yields have fallen to crazy levels. In some cases they are practically zero. Yet investors keep buying them. Bengt Saelensminde investigates why.

In this country, bond investors are held in high esteem. Many people recognise them as the shrewdest guys in the markets. They are supposed to spot the big crises before they happen. And they have a reputation for calling out irresponsible governments and crazed stock investors.

But right now, government bonds are being bid up to truly crazy levels. And as prices go up, yields come down - they are practically zero in the cases of Germany, Switzerland andthe US, as well as our very own gilts. That means that once you account for inflation, bondholders are all but guaranteed a loss.

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Bengt graduated from Reading University in 1994 and followed up with a master's degree in business economics.

 

He started stock market investing at the age of 13, and this eventually led to a job in the City of London in 1995. He started on a bond desk at Cantor Fitzgerald and ended up running a desk at stockbroker's Cazenove.

 

Bengt left the City in 2000 to start up his own import and beauty products business which he still runs today.