Buying government bonds is a popular investment strategy for many investors who wish to diversify. One government in particular that tends to attract investors is Brazil. Here are a few things to consider about Brazilian government bonds and why they are so popular.
Brazilian government bonds pay one of the highest yields of any government bond in the world. You can find bonds with a yield of over 11 percent from the Brazilian government.
Another reason that many people like to invest in Brazilian government bonds is to diversify their portfolios. When all of your investments are held in one currency in a single country, you are not truly diversified. If the country were to experience problems, your portfolio could be devastated. Buying Brazilian government bonds provides you with a good option outside of the northern hemisphere.
When you invest only in U.S. Government bonds, you have to be aware of the inflation in the country as well. Even if you think that you are getting a good yield, you have to compare it to inflation. As of early 2010, you can see that Brazil has progressed with a relatively low rate of inflation in recent years.