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Bonds and Cash
Posted: Sat Feb 13, 2016 10:37 am
by lordmetroid
I have a hard time figuring out how to invest in bonds and cash.
As a private investor in Sweden I have no way to directly purchase government bonds and bills directly, there are however many mutual funds that holds various mixes of fixed income assets.
Cash:
Could I use a mutual fund that holds a mix of bonds with a duration of 3 month maximum be it from corporations, municipalities, mortgages and the Swedish state?
Bonds:
Could I use a mutual fund that holds a mix of bonds with a duration of 2-10 years be it from corporations, municipalities, mortgages and the Swedish state?
Re: Bonds and Cash
Posted: Sat Feb 13, 2016 10:48 am
by Lang
Are you sure that you can't buy government bonds directly? This sounds pretty strange.
Re: Bonds and Cash
Posted: Sat Feb 13, 2016 11:29 am
by LazyInvestor
If I were in Sweden, paying in tons of tax money and sitting on top of that world famous welfare system, I do not think I would even be holding any bonds. Or I would do some kind of calculation that takes into account the welfare available like if it is a part of my fixed income. For example, if you know that if you can get, for example, 5000 EUR per month in case you lose job or retire, I would consider that I already have around 60000/0.03=2,000,000 EUR in fixed income (assuming 3% withdrawal rate). Then I'd go more aggressive allocation with what I have left after paying in huge tax.
Re: Bonds and Cash
Posted: Sat Feb 13, 2016 11:47 am
by ochotona
LazyInvestor wrote:
If I were in Sweden, paying in tons of tax money and sitting on top of that world famous welfare system, I do not think I would even be holding any bonds. Or I would do some kind of calculation that takes into account the welfare available like if it is a part of my fixed income. For example, if you know that if you can get, for example, 5000 EUR per month in case you lose job or retire, I would consider that I already have around 60000/0.03=2,000,000 EUR in fixed income (assuming 3% withdrawal rate). Then I'd go more aggressive allocation with what I have left after paying in huge tax.
Re: Bonds and Cash
Posted: Sat Feb 13, 2016 11:50 am
by lordmetroid
Lang wrote:
Are you sure that you can't buy government bonds directly? This sounds pretty strange.
Yes, I am sure. Only banks and other wholesalers are offered to purchase directly and these wholesalers doesn't sell to private investors in smaller chunks than 1 million SEK.