You’re scratching your head.
Don’t worry — TheStreet’s got your back.
Negative yielding debt:
It’s when you, the investor, pay interest to own a bond.
You may ask, how can that be?
Let’s start with an analogy.
You lend someone your phone charger. You expect your charger back (the charger is your money), and in the mean time, you expect the person to be extra kind to you (the kindness is your interest collections).
Well, usually, when you buy a bond, you put down your money, or your principle, to own the bond. Then you expect the debtor (the borrower) to pay you interest before you get your principle back.
Negative-yielding debt works inversely.
To see how and why that is, watch the video above.
Premium Pick: Trump’s Tough Talk Tanks Asian Markets
Success Story: Nepal’s Only Billionaire Shares His Success Mantra
Ask the Expert: Ask the Expert: Here’s How Cannabis Investing Differs From Other Sectors
TheStreet Explains: The Benefits of Using a Credit Card
Catch Up: Today’s Top News Videos Below