redbacka's - blue funk thursday, page-49

No - sold this week - needed some cash for our business as well - yes I think there could be more profit there for sure...back in cash now - but both are the place to be IMO.

Generally you can make around 15% on a 15 year bond for every percentage point the interest rates drop (give or take of course as you have the coupon interest as well - usually around 4-5% per year paid bi-annually and the Reserve Bank takes around a 1% buy/sell spread each side as well so you need to keep that in mind).

So do I think long term 15 year bond yields will keep falling - yes...

But I believe the deflation story anyone who belives the inflation story would think one was mad buying bonds...and I am no expert on geo-political risk - just saw a no brainer opportunity on the Aussie ones with the threat of interest rates dropping so high (the reserve bank will end up having to drop bond yields further to keep pushing interest rates down).

I am not sure I would be running to buy 30 year US bonds with yields as low as they are there - though I think they will still drop more as well - just the risk reward is probably not worth it for my mind. If you were in the US they would probabaly be OK but not without considerable downside risk.