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Stocks tumble, Housing prices sink, Gold prices down. The only safe haven is German Treasury Bonds. Fortunately I bought some of those trough an ETF: EB.REXX Government Germany 2.5-5.5 IS ERGG 2.5-5.5 (RXP2EX.FRA) November 6, 2008

Posted by deminvest in etf, investment, investment strategies.
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No investment is safest than German Treasury Bonds

No investment is safest than German Treasury Bonds

This ETF owns German treasury EURO Bonds with lifetime between 5.5 years and 2.5 years. It is an average  lifetime for treasury bonds.

Germany has a strong manifacturing economy. German state and its citizens have very low debt levels. In my opinion there in nothing in World as safe and risk free as German treasury bonds.

Its main holdigs are:

Germany (Federal Republic Of) 5% 2012-07-04      11.4%


Federal Republic Of Germany 5% 2012-01-04     10.5%
Germany (Federal Republic Of) 5% 2011-07-04     10.1%
Germany (Federal Republic Of) 4.5% 2013-01-04     10.0%
Germany (Federal Republic Of) 4.25% 2014-01-04     9.9%

This ETF yields 3.95% interests and its value went already up 3.74% since I bought 100 shares of RXP2EX.FRA in September worth $15000.  I earned $500 on this nice appreciation. I expect that I will get safe, steady interests form my 100 RXP2EX.FRA, whatever happens with World Economy.

Comments»

1. Mauricio - November 6, 2008

What is the name of the ETF ? I couldn’t find it in Google finance and in my Zecco

Thanks for sharing

Mauricio

2. deminvest - November 7, 2008

Mauricio, this is a link to the ETF description:

http://www.bloomberg.com/apps/quote?ticker=RXP2EX:GR

Unfortunately you need a trading account giving the ability to trade on European Markets. Etrade allows that, but zecco unfortunately doesn’t.

3. deminvest - November 7, 2008
4. Mauricio - November 7, 2008

Thanks for your prompt response !!

5. RnS - November 10, 2008

Deminvest, Are you still using Zecco? I am trying to choose between Zecco, TradeKing and Ameritrade. I plan to invest small amounts – $100-$200 every month, in mostly ETFs, and don’t have a large amount of capital with me to avail of the offers. Please help me choose.

You’ve been remarkably patient, helpful and prompt with the questions asked in the comments, and I really hope you can help me out here.

6. deminvest - November 10, 2008

@ Rns,

you should definitely use Zecco for such amounts. TradeKing and Ameritrade charge commissions that will make it impossible for you to trade on such small amounts. For instance on Ameritrade’s homepage it says trades start a $9.99 each. If you have to buy a share, then sell it after a while, you will have lost almost 20% only on commissions.

You have non choice. For such small amounts only use zecco.com

@ Mauricio,

you’re welcome🙂

7. RnS - November 11, 2008

Thanks DI, I’ll open one. I was a bit afraid of a lot of complaints about Zecco being very painful when it comes to transferring money out of the trading account.

8. deminvest - November 11, 2008

Very interesting concern Rns,

I never transfered money out of Zecco.

Do you have a link where I can read about problems transferring out?

9. Mauricio - November 12, 2008

@RnS

For such small amounts you would be better off using sharebuilder

10. Patrick - November 12, 2008

Hey Deminvest,

Im down 3k in my portfolio. I always managed to beat the market ( for a humble 3-4%). Now , Im getting a little worried. My 401K I dont even look since 5 months ago.
The Japanese stock market experience a slump as bad as our’s a few years ago. It hasn’t bounced back.
Would it ever bounce back? ( what if it doesn’t ?) I dont know if I should keep buying…

11. deminvest - November 13, 2008

Patrik,

I am not an investment guru so I don’t know what will happen… actually investment gurus and Economists… they don’t know either🙂

My uneducated opinion is that It will eventually bounce back. Maybe it will in a year, or maybe in 3 years.

I am buying $ 1000 worth of stocks every single month.

My uneducated advice is to continue buying the same amount every month if you expect to have the ability to carry that on a regular basis for at least four years. If you think you will run out of money before that, then don’t sell anything and start buying every month some German Treasury Bonds.

12. scubaxx - November 13, 2008

Hi Demin,

Im becoming a reader of your blog. I appreciate the tip regarding the German ETF.
I have a question. You mentioned you are “uneducated”. Are you saying that you dont have any training/schooling in Finance/Business?

Once again, I enjoy this blog pretty much.

Thanks

Mauricio

13. deminvest - November 13, 2008

scubaxx it is interesting that you did notice my use of the word “uneducated” .

I do attach to “uneducated” several meanings:

1) the meaning you do suggest: I do not have schooling or training in Finance.

2) I do make fun of the expression “educated guess” http://encarta.msn.com/dictionary_1861689639/educated_guess.html by using its opposite “uneducated guess” or “uneducated suggestion”.

3) I do also imply that, maybe, some “educated guesses” given out by Ivy League super-educated “Financial geniuses” may not always be much better than my uneducated guesses🙂

4) I try to tell my 3 or 4 readers that my suggestions aren’t any better of what you guys can think by yourselves. As a matter of fact I do often end up buying stocks suggested by comments to my posts. I write here to discuss stocks with fellow small investors. I also write so that I can later read why I decided to buy a certain stock and try to learn from my mistakes.

14. RnS - November 15, 2008

@DI: Here it is:

http://theitguysblog.com/2007/10/16/zecco-trading-word-to-the-wise-stay-away/

I finally opened accounts at TradeKing and Zecco, and am very happy with the very prompt customer service at TradeKing. I don’t have $2500, so I won’t be able to make use of the free offers, but I’m ok with $5 trades. Let’s see how things go.

@Mauricio: Thank you, I’ll read up on them.

15. deminvest - November 15, 2008

@Rns

$ 5 is too much commission on a $100 trade. If you pick a good horse, you buy, gain and sell you’ll lose 10% just on commissions.
Do less trades but invest no less than $200 on each trade.

16. RnS - November 16, 2008

You have a very valid point DI, 10 trades a month will just incinerate all profits. I just want to check out some brokers and am willing to burn $50 in learning. $200 is a reasonable number, let’s see how it goes.

On an aside, I’m really shocked at the sky-high brokerage rates here. My friends from Asia tell me that the brokerage rates in most countries there are just 0.4% of the trade value, flat. I wonder what is keeping the prices here so artificially high.

Also, it’d be great if you could turn on the comment tracking feature in wordpress. Your commenters will then get an option of getting all new comments on a thread by mail.

17. deminvest - November 17, 2008

@RnS

I’d love to turn on the comment tracking feature in wordpress, but I can’t. Either I can’t find it on my managing board, or it simply it isn’t available.

There is comment tracking for people who register on WordPress. My theory is that WordPress guys don’t want to implement that feature for everyone so they can get more registrations on WordPress.com

D you know a way by which I could implement comment tracking on this Blog? Could you help me on that RnS?

18. RnS - November 20, 2008

@DI: You need to install a plugin:

http://wordpress.org/extend/plugins/subscribe-to-comments/

But it’s very simple, it only takes a few minutes. The instructions are on the ‘Installation’ tab.

19. RnS - November 20, 2008

@DI: You need to install a plugin:

http://wordpress.org/extend/plugins/subscribe-to-comments/

But it’s very simple, it only takes a few minutes. The instructions are on the ‘Installation’ tab.

20. scubaxx - November 21, 2008

when r u gonna post again man ?

21. deminvest - November 21, 2008

thank you for asking me scubaxx, I do need to be pushed sometimes🙂

I have to point out a fact of my life: I’m very lazy…

I have a post in mind since Sunday… Your request may convince me. I hope that today, later. I may win my natural attitude… and will write it down🙂

22. deminvest - November 21, 2008

@ RnS,

unfortunately the link is for wordpress.org, which is something you install on a customer user space. I am using wordpress.com where wordpress is installed by wordpress guys and I can’t install anything here😦


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