Treasury bonds? (1 Viewer)

[serenetwilight]

hey guys sorry if this is the wrong forum to put it, but has anyone ever invested in treasury bonds? how do you know the price? (i know the formula to calculate it but i am sure there are other demand and supply factors) is there a restriction on maturity dates?

any help or advice is appreciated, and thx in advance.

 

[ComingUpForAir]

They pay their face value at the maturity date. Are you planning on trading them in the secondary market?? Supply and demand only effect the price if you plan on selling/buying in the secondary market, that is, supply/demand determine interest rate, which determines the present value of the bond.
(I assume your talking about Australian Treasurey Bonds, i.e fedral)
I could help you more if you clarified your question.

 

[Affinity]

Banks pay higher interest on their online accounts.. not much reason for a private individual to buy government bonds
prices(yields) are published.

 

[serenetwilight]

They pay their face value at the maturity date. Are you planning on trading them in the secondary market?? Supply and demand only effect the price if you plan on selling/buying in the secondary market, that is, supply/demand determine interest rate, which determines the present value of the bond.
(I assume your talking about Australian Treasurey Bonds, i.e fedral)
I could help you more if you clarified your question.

this is what i was reading: RBA: Buying Bonds from the Reserve Bank

on the last line of that page (just above the footnote) it says "Please ensure that the amount of the cheque is sufficient to allow for the Bank’s administrative charge and any increase in the market price of the Bond that might occur prior to the application being processed"

so im sure the demand and supply factors influence the original purchase price as well, since yields and interest only change like once in a month. my question was whether there is a place that lists the price of the bond and frequently updates it, cos i cant find it anywhere on the rba website.

as for the maturity part, i was wondering whether there is a time restriction, i.e. whether it has to be more than 30 days, or it has to be under 10 years, or something like that.

 

[wrong_turn]

RBA: Bulletin Statistical Tables

please dont tell me this is all you were after?? =S

 

[ComingUpForAir]

Okay I was talking about the wholesale (over-the-counter) market, I'm not too familiar with the mechanism for these "Small investor" bonds, but are you planning on making a long term investment? (or trying to make some capital gains).
I had a quick look but i'm not sure where to find current interest rates, it might be the case that you have to ring up someone to get a bid-quote.


http://www.rba.gov.au/FinancialServices/CGBondFacility/otc_prices.xls

 

[Cookie182]

Treasury Bonds are not a good investment. At best, all they do is provide a safeguard against inflation. This is simply because they are considered "risk-free" and their yield reflects this.

As CAPM suggests:

E(R)= E(Rrf) + B(Compensation for bearing risk)

You gotta' bear some risk for some return.

 

[§eraphim]

Note that the face value on these bonds is $100,000 from memory, and you usually buy them from authorised dealers. You get crossed on the spread for buying small lots.

There are many other higher-yielding alternatives to govies, eg supra's, semi's, gov guaranteed bank debt.