How Buy German Bonds

German bonds are projected to be very stable and produce a good yield.

Transitioning an investment portfolio from stocks to bonds, which produce regular income streams via interest payments, is part of a standard retirement strategy. Choosing which bonds to buy is largely a function of picking the economies that will grow and fight inflation. One sound bet in this regard, based on how the finances of the euro are shaping up as of August 2010, is Germany.

Things You'll Need

• Money to invest
• A brokerage account

Instructions

1. Contact your investment broker. If you do not have an investment brokerage account, you will need one to buy German bonds.

2. Request the full disclosure forms on buying bonds in other countries from your broker.

3. Read the prospectus on German bonds. In particular, look at the price of the bonds, any markups or commissions on the sales and any transaction fees related to currency exchanges. German bonds will pay their interest dividends in euros; you may lose money on foreign exchange currency conversions, depending on the relative value of the euro and the dollar.

4. Put in the buy order with your broker.

Tips & Warnings

• While it is possible to buy German bonds directly from the German government, doing so from the United States requires that you be able to read complex financial documents in German. It is highly recommended you use a broker to buy foreign bonds.

• Any investment you make is balancing risk with rate of return. While there is, as of August 2010, a current structural advantage to buying German bonds, it should only be one element of a well-managed portfolio.

References

• Wall Street Journal -- Pimco Favors German Bonds To US