Dear forum users,

My knowledge of economics is really really low. That's why the money I have been saving in the last few years here in CH are just sitting in my PostFinance eDeposito account, yielding a poor 1% interest rate.

Now, given the latest high interest rates paid by the Italian government on its bonds (BTP), I'd like to buy some of those and bet that Italy and the Euro will not go bankrupt, at least for a couple of years. I went to talk to the postfinance guy, who did not know much, but could confirm that I can't buy an BTPs thorough their bank.

So, the question is: what would you recommend me to look into to buy some 10K euros of these obbligations? I'd rather not open a bank account in Italy just for this. I mean, there must be a way to buy these bonds from here, right? Which bank should I try to ask? Any pointer appreciated.

Thanks!

G

If you need to ask, you shouldn't be doing it. Sorry if that sounds harsh.

There are much better options for investment for someone with not much knowledge of the subject. I recommend some kind of fund which splits their investment between stocks and fixed interest investments (i.e. bonds).

Remember, that it takes time to make a good return, you have to be prepared to lock your money up for 5, 10, or more years. So only invest money you're not going to miss.

Do yourself a favour: Stay away from Italian bonds.

Italy is bankrupt, period.

If you are really into that kind of risk/reward, I would suggest you to buy a mixed Latam bonds ETF like this one:
Market Vectors® LatAm Aggregate Bond ETF (BONO)
http://www.vaneck.com/funds/BONO.aspx

Having said that, I would stay away from debt markets right now (unless you need a constant interest yield) and focus on Gold, Platinum, Oil and a mix of equities like:

http://www.google.com/finance?q=amgn
http://www.google.com/finance?q=msft
http://www.google.com/finance?q=oxy
http://www.google.com/finance?q=ctl
http://www.google.com/finance?q=ctsh
http://www.google.com/finance?q=intu
http://www.google.com/finance?q=wag
http://www.google.com/finance?q=hrs
http://www.google.com/finance?q=twc
http://www.google.com/finance?q=usb
http://www.google.com/finance?q=spg

Of course investment is a very personal issue and you have to consider several factors which you know but I ignore.

Forgot to mention:

Do you think Italian yields are high?

Actually, they are artificially "low" due to the ECB intervention and its cheap money.

Golden rule on investment, never break it: do not concentrate your savings on single risk exposure. You should always seek to diversify your risk.

Thanks for the reply. I checked the investment funds and they have one major issue (for me): you can't choose what's in them. I want to decide where to put my money (e.g., my poor home country).

Obviously I would not buy the same bonds for all my savings, but there's some amount which I am confident I won't be needing in the next couple of years. Now these bonds pay something like 6%, if the country does not end up like Greece (and Italy has a much larger and stronger economy) it's a rather good investment.

Anyway, sticking to the question: ideas on how to get them? I know the Italian government has auctions at specific dates and in Italy you can ask the bank to buy some BTPs for you directly from the government. This would be my favourite thing to do, but I could also buy them on the market (though they don't seem to be sold in the Swiss market?).

Thanks.

Greece is about to default on its debt, today Portugal yield shot up. As soon as Greece falls, Portugal will be in deep sh*t and, again, Spain and Italian yields will shoot up.

At least wait until that happens and you will be able to get cheaper, theoretically more rewarding bonds.

I say theoretical because I believe its a matter of time for Italian bond-holders to get a haircut.

In what you write I notice the assumption that you will get paid. Don't take that for granted.

Your country is a beautiful country but has been mismanaged for several decades. Don't count on it paying you back.

Well I hope not
In a way, I'd like to buy some of the Italian debt also to give my tiny contribution for that not to happen.

Thanks, I'll be looking into this.

No, I am against 'investing' in these things. I'd like my money to be used for something. If I buy a piece of gold it's going to sit in a drawer without moving anything in the economy, same or worse for oil: if I buy oil would I not just make anyone's petrol a tiny bit more expensive?

Pardon my incopetence, if the above is totally wrong I'd appreciate some simple explanation of where and why it is so.


I thought the ECB stopped buying them, am I wrong?


Sure, but:

1 - investment funds contain things which I don't want to finance
2 - to diversify enough on our own, you need a lot of money, since you can't buy 10 CHF of something

So, I might be a fool, but for once I know what I'd like to buy. Too bad my bank does not sell it. Where can I find it? Anyone knows?

If you are looking for a decent return the investment below has been performing very well since it started.

http://www.coralportfolio.com/fund1/...ent-commentary

Interesting concepts. You seem to be an idealist and believe in the common good of people and their intentions. I cannot give you advice on your question; however, have you already exhausted all your entrepreneurial ideas already?

No comment on that, I assumed you were just interested in being rational. I was wrong, you are right.

You're welcome

Same comment as 1st answer above


Indirectly the ECB is flushing banks with money and to some extent banks are buying sovereign debt to benefit from what is called "carry trade". Having said that, they've done so to a lesser degree than what the ECB might have hoped for. You can say that at least, the banks have not liquidated so much sovereign debt positions as a result of getting the cash from the ECB.

In part, same comment as 1st answer above. An ETF can help you to diversify and actually, you can control fairly well what it does since it is publicly declared.

You can open trading accounts very easily and trade small amounts of money too.

Check this review:
http://www.stockbrokers.com/2011brokerreview.html

Just an additional note: If you are Italian and hold assets in Italy, like real estate, you may already be highly exposed to Italian risk. Don't make it worse.

Good luck!

No, definitely not. I'll be travelling the world later this year and for several months (maybe I get good ideas on the way ), so I was looking for a way to invest some money for a couple of years.

How am I not being rational? Believing that Italy is not (yet) bankrupt? Or that by buying a bit o its debt I could be helping a little?

I guess I'll look again into them at some point.

Cool, that seems to be something which could contain an answer to my original question, thanks for that. I'll have a look.

No one's calling you a fool, but your statements are creating some confusion about your objectives. You first sound like you want to better your returns but then are concerned with the social responsibility aspects of investing.

A. If you have so much money that you think your investing will have a social impact then you're asking for advice in the wrong place. Unless your playing with 7 figures+, you won't have any impact on the price of a liter of fuel.

B. People generally choose their investments based on their risk tolerance (if it's lost what is the damage and can they recover) and their investment goals. I'm just guessing but it doesn't sound as if you have either of these worked out.

C. Government bonds are only guaranteed by the government who issues them. If they are in trouble then so is your money. Are you willing to risk your investment for a 6% gain over 5 years ?

I can't directly answer your questions for 2 reasons: I don't understand what are your true objectives other than to get your money out of your Post account, and I'm not a financial advisor.

I strongly recommend you sit down with a qualified investment advisor to map out an investment strategy and take it from there. Bonds and mutuals are just the tip of the iceberg when it comes to investing.

Until you've done that there is one piece of advice I can give to you, keep your money in your Post account until you have a solid plan on where to invest and why.

Good luck

Strange, the title is quite clear: I want to buy BTPs.

My concerns about investment funds and gold/oil only came up in response to who suggested me to look into those rather than the BTPs I'd like to buy.

Thanks, I appreciate. I did go to talk to the investment guy at the postfinance, but that has not been really helpful. Though he said that my idea of buying BTPs was a good one and that he'd look into it himself .

But sure, maybe I should try again with some better advisor. Thing is that I am quite sceptical about adviros: aren't those guys the ones who created this whole crisis and still are not paying for what they have done?
Now, this is not really related, but I got to think about about the rating agencies who today declassed again some EU countries (taking away the A from Italy): weren't they the ones giving AAA rating to Lehman Brothers days before it went bankrupt? I find it really hard to trust these guys in the financial business...

You can do so with almost any normal Italian bank, brokerage firm in Italy or through any private bank in Switzerland. This latter option though, will generally imply that you have a private banking service.

BTW, sorry to have extended myself over the aims of your initial question. I can notice now that you have a very clear direction: towards disaster.

Just a quick answer here. Of course I won't have an impact on the price of fuel, in the same way as my habit of biking to work rather than taking the car has no tangible effect on the city's pollution. But only because I can only produce limited harm does not mean I am willing to do it.

But postfinance did not let me, nor (as I said earlier) I wish to open a banck account in Italy just for this.

Com'on, stop it. I understood your opinion, no need to repeat it again.

http://www.bbc.co.uk/news/business-15748696

Nice. Strange though that Spain is labeled as 'medium' risk despite its 20% unemployment rate...

And, yet, here you are soliciting advice from people on the internet who are, very likely, in the financial services industry (it IS Switzerland after all). FWIW, in general, it's been shown that choosing a nice indexed fund often performs better than if you'd listened to 'financial advisors'. There are ways of doing 'socially responsible investing', but you really really need to do your research if you are going to be investing in that way. Otherwise, you might as well just head down to Italy with sacks of cash and start handing out money to random strangers. That way, you'll have more effect on the life of the average Italian than if you lost your money to the bankers. As an after thought: 6% yield over five years? I'm sorry, to me that sucks as a rate of return, especially for someone who seems to be non-risk-averse. .