Who Buys Bonds With A Negative Interest Rate?

Many developed countries are issuing bonds at negative interest rates. That means people are buying them expecting to get paid back less than they invested. Why then are people buying them?

RIEDER: It just feels surreal, and it feels that it's not natural buying negative-yielding bonds. 

GOLDSTEIN: Of course, it's not natural. People with money want to make more money. They want to invest in things that'll grow. But in a lot of the world right now, they're scared to risk their money, to bet on some strong economic recovery. So they're buying bonds with negative interest rates. They're afraid if they invest in something riskier, they'll lose even more.

DYI Comments: When the U.S. stock market begins its journey south there will be a flight to quality - T-bills and notes - the short end of the yield curve will be negative and yet out of fear they will be massively purchased.

So hang onto your cash better values are ahead! 

DYI