Remember Greece? As in: "the nation that can't pay the interest on its government bonds, and will almost certainly default and take down the entire European Union banking system with it?" Or: "the nation that all the 'experts' predict will exit the Eurozone and print enough Drachmas to pay off its crushing debt burden?" While we do not invest in the Greek bond market, the investment experience of Greek bonds is a great example of how risk and return are connected.
Last week, Greece returned to the bond market for the first time in four years, selling all $4 billion worth of 10-year government bonds at a surprisingly low aggregate interest rate of 4.75%.