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Hi all newbie here, introduction and question about Australian government bonds

Discussion in 'Beginner's Lounge' started by Samtheman, Mar 6, 2014.

  1. Samtheman

    Samtheman

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    Hi all newbie here, i am near the end of "The intelligent investor" by Benjamin Graham, Warren Buffet calls it 'The best book on investing ever written' and am near the end of a macro economics textbook and just finished a financial institutions, markets and instruments textbook. I have ~5k to invest i am not looking to swing/day trade/CFD/forex (other than maybe 2% of that 5k just for fun and to dabble) i am looking to INVEST (Graham makes a distinction between INVESTING and SPECULATING in his book as he says 'If you cant stand the thought of holding a share for 10 years then dont bother holding it for 10 minutes, most people (including myself before reading his book) think they are investing but they are speculating)). I will put 50% in government bonds and 50% in Berkshire Hathaway (Buffetts portfolio of companies, can read his letters to investors/financial statements on their website, free insight from the greatest investor alive). So my mindset is i am never selling i am investing for my kids.

    So on commsec it looks like you can open an international account to get access to NYSE (for Berkshire) but not sure about government bonds on ASX? Im in Australia how do i go about buying government bonds here?
     
  2. kid hustlr

    kid hustlr

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    Re: Hi all newbie here brief introduction and question about Australian government bo

    What's the reason for wanting to invest in Australian government bonds specifically?

    If you wanted a conservative portion of your portfolio you could consider something far easier (and no brokerage cost) like a term deposit or a high at call cash account?
     
  3. Samtheman

    Samtheman

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    Re: Hi all newbie here brief introduction and question about Australian government bo

    Per Grahams book he suggests 50/50 bonds/shares, i am from Aus so thought Aus bonds vs Us or some other country bonds.
     
  4. Julia

    Julia In Memoriam

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    Re: Hi all newbie here brief introduction and question about Australian government bo

    What consideration do you plan to give to the yield offered on the various investment choices?
     
  5. Samtheman

    Samtheman

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    Re: Hi all newbie here brief introduction and question about Australian government bo

    Well Berkshire Hathaway has been growing at ~19.7 % for 48 years and Aus Government bonds per Bloomberg on a 15 year bond is ~4.4%.
     
  6. So_Cynical

    So_Cynical The Contrarian Averager

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    Re: Hi all newbie here brief introduction and question about Australian government bo

    You can buy Aust Govt bonds on the ASX thru any Aussie broker.

    http://www.asx.com.au/products/bonds/exchange-traded-agbs.htm

    As for BH i thought there was a ASX listed stock that held shares.?? :dunno: anyway Google has been growing at a PA rate of 54% for ten years.
     
  7. Samtheman

    Samtheman

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    Thanks for that, wow @ google, was just looking at NAB and westpac they offer ~4.5 % pa for a 15 year cash term deposit, better than some bonds but some bonds are up to 6.25% pa or so though.... I was a bit confused with the bonds on ASX am i right to assume this is the secondary market of bonds if so does someone need a broker to buy them or can they buy them themselves and where/how does the gov first offer the bonds?there is no offers in the offers column lol

    http://www.asx.com.au/asx/markets/interestRateSecurityPrices.do?type=GOVERNMENT_BOND
     
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