/ Register

  • Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

Govt Bonds

Discussion in 'Beginner's Lounge' started by Forest, May 6, 2019.

Tags:
Most Liked Posts
  1. May 6, 2019 #1
    Forest

    Forest

    Posts:
    3
    Likes Received:
    0
    Joined:
    May 6, 2019
    Hello, I have a few questions re govt bonds and whether it is worthwhile to do this.
    I'm looking for something that is low risk and hopefully with no capital gains tax.
    I'm new to the workforce (24 years old) and have managed to save a small sum. I have travelled extensively in the past few years and this has taken its toll on my savings. I'm wanting to invest some money away for a number of reasons, one being so that I can't spend it.

    Aust Fed Govt bonds and state bonds - I looked into QLD bonds and the interest dividends are around the 1.27% per quarter mark or 1.27% half yearly. I asked the person at Link Market Services about which one was best but all she said was for me to find a financial advisor. Likewise I asked her if there was a capital gains tax on govt bonds and she would not answer.

    Where would be best for me to park around $30,000? Is it worth buying shares with this amount? Are govt bonds currently worthwhile?

    Thanks
     
  2. May 6, 2019 #2
    Zaxon

    Zaxon The voice of reason

    Posts:
    786
    Likes Received:
    833
    Joined:
    Aug 5, 2011
    It all comes back to comparing bonds with their alternatives. Here is a sample of government bonds I grabbed. Have a look at the yield column.
    upload_2019-5-6_15-57-22.png

    I can get 2.9% by sticking it a savings account at my bank. And if you want it "locked away", you can use term deposits. That's your benchmark. The sorts of returns I'm seeing on government bonds isn't comparing with that, in most cases.

    The other downside of bonds in general, is that their capital isn't secure. Their value fluctuates. Unlike a bank deposit, they're a risk product. If my money is at risk, I want a much higher return.
    Yes to shares. You can park your money in a cheap, broad-based index fund and get around 11%. But be prepared to leave it there for 7+ years, say, as the market can fluctuate quite a lot.
     
    Forest likes this.
  3. May 6, 2019 #3
    Forest

    Forest

    Posts:
    3
    Likes Received:
    0
    Joined:
    May 6, 2019
    Thanks for that. What exactly is a cheap, broad-based index fund?
     
  4. May 6, 2019 #4
    Zaxon

    Zaxon The voice of reason

    Posts:
    786
    Likes Received:
    833
    Joined:
    Aug 5, 2011
    VAS is an ETF that covers the ASX S&P 300 with really low fees. IVV is an Australian ETF, but follows the US S&P 500. Both good examples.
     
    Forest likes this.
  5. May 13, 2019 #5
    Forest

    Forest

    Posts:
    3
    Likes Received:
    0
    Joined:
    May 6, 2019
    Thanks! I'll do some research into all that information :)
     
Loading...
Similar Threads - Govt Bonds
  1. clowboy

    Govt. Bonds listing on the ASX today

    clowboy, May 21, 2013, in forum: ASX Stock Chat
    Replies:
    37
    Views:
    9,561
    McLovin
    Jun 7, 2013
  2. sinner

    Bank accounts vs. Govt bonds in light of the Guarantee

    sinner, Jan 11, 2012, in forum: Business, Investment and Economics
    Replies:
    34
    Views:
    9,042
    MrBurns
    Apr 22, 2013
  3. Azzachazza

    OptionsXpress Passport/Govt. ID#?

    Azzachazza, Apr 14, 2010, in forum: Trading/Investing Resources
    Replies:
    0
    Views:
    5,767
    Azzachazza
    Apr 14, 2010
  4. maxiewawa

    Govt. Guarantees on Deposits?

    maxiewawa, Sep 22, 2009, in forum: Business, Investment and Economics
    Replies:
    7
    Views:
    4,026
    GumbyLearner
    Sep 25, 2009
  5. MrBurns

    Vic state Labor Govt stupidity

    MrBurns, Nov 10, 2008, in forum: General Chat
    Replies:
    11
    Views:
    4,025
    chops_a_must
    Nov 10, 2008

Share This Page