CHAPTER 13

International Bond Markets

FOREIGN AND OFFSHORE

Are interest rates low in your country of residence?

“Don’t be satisfied!” the investment pundits in the media demand. You should get more and better and bigger returns. You should diversify your bond holdings so that they move independently of price and interest fluctuations of your home country bonds. You can also benefit from hot currency plays. This is the current pitch to encourage you to invest in foreign bonds.

How should you accomplish all this? The media advise that by investing in foreign bonds and bond funds you will make more money and reduce your risk. We are told that foreign bonds are not correlated to U.S. bonds and therefore will be a counterbalance to problems happening ...

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