29/9/2011
Investors in Australia have chosen to go with more secure sources of investment by going with government bonds, and have followed suit with the US Treasuries, after a 10 year bond futures contract was trading at 95.750, while on Wednesday it was trading at 95.690, with a yield of 4.25%.
This is due to the ongoing uncertainty over Greece's debt crisis and the measures the G20 and the Eurozone are going to initiate to solve this problem.
In Commerce we have learnt that Government bonds hold less risk, but also less return. People that purchase these bonds generally prefer the security of these bonds, and therefore are prepared to take less risk. In these current times of economic uncertainty it is therefore a good time to hold these types of investments as stocks are likely to fall, or be very uncertain for an extended period of time. These types of assets are called Income or defensive assets. This is a particular area in most investment portfolios, which can also consist of investment accounts, shares, property, managed funds and superannuation.
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