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Obviously this article shows up when the negative rates are already here, with the benefit of hindsight. What I am more interested in at this point is what is

Obviously this article shows up when the negative rates are already here, with the benefit of hindsight. What I am more interested in at this point is what is a good, safe alternative for a small time investor who’s already overweight on equities and housing. Bonds used to be the sensible pillar that worked at times when stock market crashed and now it doesn’t really make sense to use them for a small guy.

all_blue_chucks 7y ago
It's only government bonds that go negative. Corporate bonds will always provide a positive yield.
- deleted 7y ago
  [deleted]
- shshehe 7y ago
  If you can look into the future w that certainty you should trade stuff.
- kgwgk 7y ago
  Except they don’t already in many cases. https://www.barrons.com/articles/yields-go-negative-on-corporate-bonds-not-just-government-debt-51562942845 https://www.barrons.com/articles/yields-go-negative-on-corpo...
- christophilus 7y ago
  Apple issued negative bonds in some European country recently, if I understand this[0] correctly. Anyway, I don't think there's anything preventing a company from issuing negative bonds. Whether or not anyone would buy them is another question. [0] https://markets.businessinsider.com/bonds/apple_incsf-notes_201530-bond-2030-ch0271171693 https://markets.businessinsider.com/bonds/apple_incsf-notes_...
- samsonradu 7y ago
  Well one has to consider that it's pretty much the same big pool of money chasing both. This money pool thinks that German 10Y yield should be around -0.60%, while the Italian 10Y yields a juicy 1.62%. That says quite a bit about the future solvency issues around Italy. Bottom line is that if there are still positive yielding bonds in a market dominated by negatives (we're not yet there) the risk of default is priced in.
perfunctory 7y ago
Invest in reducing your energy bill if you haven't done so yet. solar plus storage plus house isolation. Should also raise the value of the house. In theory.
- seiferteric 7y ago
  Can you or anyone recommend a unbiased solar ROI calculator? I have been looking for something, bu every site that I find is trying to sell me solar, so it's not too unbiased. I already have a couple quotes, and I know roughly what my rates will be, so I should be able to plug all the numbers into something to find out what % ROI I will get.
  - koverda 7y ago
    Just make one? Calculate how much the install costs per kw, and how much your electric costs...
  - shados 7y ago
    I don't have a good calculator, but step 1 is to make sure you BUY the panels, and not rent them or fall into any kind of weird plans where you resell some energy for free panels or whatever. So your ROI is pretty much calculated with: How much do the panels cost (installed) How long do they last, whats expected maintenance, etc How much energy are they expected to produce Whats your electricity bill. From there its pretty simple math. The hardest part is how much energy they are expected to produce, and no online calculator will help figuring out how much sun hits your roof.
  - toomuchtodo 7y ago
    Rough numbers: https://www.solarpowerrocks.com/wp-content/uploads/2016/12/space-infographic-full-new.jpg https://www.solarpowerrocks.com/wp-content/uploads/2016/12/s... Google Sunroof: https://www.google.com/get/sunroof https://www.google.com/get/sunroof Always buy the panels (no PPA), don't buy storage unless your net metering agreement with the utility is terrible (likely kills the ROI, storage isn't cheap enough yet). Ensure your tax liability is enough to capture the full 30% federal tax credit. Check for state, utility, and SREC benefits in your area. Panels are 25 year warranty, stay away from SolarEdge inverters; their mortality rate has skyrocketed over the last 12-18 months. Paying cash is best, otherwise find the cheapest debt you can find to finance whatever remains after incentives.
opportune 7y ago
Not sure what your criteria for "good, safe" is but if you're interested in similar asset classes: Government bonds in foreign currencies. Of course this exposes you to whatever that country does with their central bank and to foreign exchange rates. Corporate bonds, obviously riskier than government bonds but at least you can get positive interest rates in your preferred currency Preferred stock, which are similar to bonds. Before you invest in these, make sure you know how they work. They can be called back by the issuer Other asset classes which are less safe but could help you diversify: crypto, commodities and precious metals, collector's items and art, foreign currencies. Wouldn't really recommend putting too much money in this
kitten_smuggler 7y ago
Bitcoin and gold imo, in addition to a balanced portfolio of stocks, bonds and real estate.
- outworlder 7y ago
  > Bitcoin and gold imo Bitcoin makes zero sense as an investment. Doubly so during a recession.
  - Izkata 7y ago
    On that second point, we don't know that yet. It didn't exist during the last recession, so it's still a guess as to what'll happen.
- programmertote 7y ago
  Aside from buying physical gold at a refinery, is there a place to buy gold from the equities market? Sorry if this question sounds naive/ridiculous. If it's in my country, people would go to gold/jewelry shops and buy gold. In the US, I'm not sure if it's the case. Thank you.
  - SmooL 7y ago
    Check out gold ETF's. They hold the physical gold so you don't have to, you just buy a stake in the physical assets. The ETF prices will vary depending on the specific ETF, but you can find ones that track very closely.
  - umeshunni 7y ago
    You can buy a Gold ETF such as GLD: https://www.spdrgoldshares.com/ https://www.spdrgoldshares.com/
everybodyknows 7y ago
If in the U.S., buy your $10k quota of Savings Bond, Series I: Pays at least the CPI-U inflation rate, liquid after one year, favorable tax treatment, highly convenient. https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm https://treasurydirect.gov/indiv/research/indepth/ibonds/res...
- ac29 7y ago
  At least at the moment, it would seemingly make more sense to invest in 1-year treasury bonds. The interest rate is higher, they are more liquid, they are more convenient to buy and sell, and they are taxed the same as I-bonds. There's also no limit to the amount you can buy.
  - gnopgnip 7y ago
    If you expect interest rates to go down in the future, the 10 year bonds would be a better investment
  - kgwgk 7y ago
    And what are you going to do with that money in one year. If you’ll need to invest it again the answer is not so obvious.
hndamien 7y ago
Bitcoin.
gnopgnip 7y ago
If you expect interest rates to decline, bonds still make sense as their value increases. US fiscal policy is unlikely to have negative rates in the foreseeable future.
1e-9 7y ago
Take the portion you want to protect with least risk, divide it into $250K chunks (the FDIC limit) and put each in a savings account with a different bank. You'll make a small interest rate and you'll have FDIC insurance covering the entire amount. That's safer than any of the Treasury securities since you will still have the backing of the US government, you can use it to rebalance your portfolio at any time, and you don't have interest rate risk. This is one area where you have an advantage over the big players like Pimco, who can't protect themselves with FDIC insurance.

all_blue_chucks 7y ago

It's only government bonds that go negative. Corporate bonds will always provide a positive yield.

deleted 7y ago
[deleted]
shshehe 7y ago
If you can look into the future w that certainty you should trade stuff.
kgwgk 7y ago
Except they don’t already in many cases. https://www.barrons.com/articles/yields-go-negative-on-corporate-bonds-not-just-government-debt-51562942845 https://www.barrons.com/articles/yields-go-negative-on-corpo...
christophilus 7y ago
Apple issued negative bonds in some European country recently, if I understand this[0] correctly. Anyway, I don't think there's anything preventing a company from issuing negative bonds. Whether or not anyone would buy them is another question. [0] https://markets.businessinsider.com/bonds/apple_incsf-notes_201530-bond-2030-ch0271171693 https://markets.businessinsider.com/bonds/apple_incsf-notes_...
samsonradu 7y ago
Well one has to consider that it's pretty much the same big pool of money chasing both. This money pool thinks that German 10Y yield should be around -0.60%, while the Italian 10Y yields a juicy 1.62%. That says quite a bit about the future solvency issues around Italy. Bottom line is that if there are still positive yielding bonds in a market dominated by negatives (we're not yet there) the risk of default is priced in.

perfunctory 7y ago

Invest in reducing your energy bill if you haven't done so yet. solar plus storage plus house isolation. Should also raise the value of the house. In theory.

seiferteric 7y ago
Can you or anyone recommend a unbiased solar ROI calculator? I have been looking for something, bu every site that I find is trying to sell me solar, so it's not too unbiased. I already have a couple quotes, and I know roughly what my rates will be, so I should be able to plug all the numbers into something to find out what % ROI I will get.
- koverda 7y ago
  Just make one? Calculate how much the install costs per kw, and how much your electric costs...
- shados 7y ago
  I don't have a good calculator, but step 1 is to make sure you BUY the panels, and not rent them or fall into any kind of weird plans where you resell some energy for free panels or whatever. So your ROI is pretty much calculated with: How much do the panels cost (installed) How long do they last, whats expected maintenance, etc How much energy are they expected to produce Whats your electricity bill. From there its pretty simple math. The hardest part is how much energy they are expected to produce, and no online calculator will help figuring out how much sun hits your roof.
- toomuchtodo 7y ago
  Rough numbers: https://www.solarpowerrocks.com/wp-content/uploads/2016/12/space-infographic-full-new.jpg https://www.solarpowerrocks.com/wp-content/uploads/2016/12/s... Google Sunroof: https://www.google.com/get/sunroof https://www.google.com/get/sunroof Always buy the panels (no PPA), don't buy storage unless your net metering agreement with the utility is terrible (likely kills the ROI, storage isn't cheap enough yet). Ensure your tax liability is enough to capture the full 30% federal tax credit. Check for state, utility, and SREC benefits in your area. Panels are 25 year warranty, stay away from SolarEdge inverters; their mortality rate has skyrocketed over the last 12-18 months. Paying cash is best, otherwise find the cheapest debt you can find to finance whatever remains after incentives.

opportune 7y ago

Not sure what your criteria for "good, safe" is but if you're interested in similar asset classes: Government bonds in foreign currencies. Of course this exposes you to whatever that country does with their central bank and to foreign exchange rates. Corporate bonds, obviously riskier than government bonds but at least you can get positive interest rates in your preferred currency Preferred stock, which are similar to bonds. Before you invest in these, make sure you know how they work. They can be called back by the issuer Other asset classes which are less safe but could help you diversify: crypto, commodities and precious metals, collector's items and art, foreign currencies. Wouldn't really recommend putting too much money in this

kitten_smuggler 7y ago

Bitcoin and gold imo, in addition to a balanced portfolio of stocks, bonds and real estate.

outworlder 7y ago
> Bitcoin and gold imo Bitcoin makes zero sense as an investment. Doubly so during a recession.
- Izkata 7y ago
  On that second point, we don't know that yet. It didn't exist during the last recession, so it's still a guess as to what'll happen.
programmertote 7y ago
Aside from buying physical gold at a refinery, is there a place to buy gold from the equities market? Sorry if this question sounds naive/ridiculous. If it's in my country, people would go to gold/jewelry shops and buy gold. In the US, I'm not sure if it's the case. Thank you.
- SmooL 7y ago
  Check out gold ETF's. They hold the physical gold so you don't have to, you just buy a stake in the physical assets. The ETF prices will vary depending on the specific ETF, but you can find ones that track very closely.
- umeshunni 7y ago
  You can buy a Gold ETF such as GLD: https://www.spdrgoldshares.com/ https://www.spdrgoldshares.com/

everybodyknows 7y ago

If in the U.S., buy your $10k quota of Savings Bond, Series I: Pays at least the CPI-U inflation rate, liquid after one year, favorable tax treatment, highly convenient. https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_iratesandterms.htm https://treasurydirect.gov/indiv/research/indepth/ibonds/res...

ac29 7y ago
At least at the moment, it would seemingly make more sense to invest in 1-year treasury bonds. The interest rate is higher, they are more liquid, they are more convenient to buy and sell, and they are taxed the same as I-bonds. There's also no limit to the amount you can buy.
- gnopgnip 7y ago
  If you expect interest rates to go down in the future, the 10 year bonds would be a better investment
- kgwgk 7y ago
  And what are you going to do with that money in one year. If you’ll need to invest it again the answer is not so obvious.

hndamien 7y ago

Bitcoin.

gnopgnip 7y ago

If you expect interest rates to decline, bonds still make sense as their value increases. US fiscal policy is unlikely to have negative rates in the foreseeable future.

1e-9 7y ago

Take the portion you want to protect with least risk, divide it into $250K chunks (the FDIC limit) and put each in a savings account with a different bank. You'll make a small interest rate and you'll have FDIC insurance covering the entire amount. That's safer than any of the Treasury securities since you will still have the backing of the US government, you can use it to rebalance your portfolio at any time, and you don't have interest rate risk. This is one area where you have an advantage over the big players like Pimco, who can't protect themselves with FDIC insurance.