Sentences with phrase «rising interest rates reduce»

January 2008 by AAII Staff No matter the cause of interest rate movements, the impact on the bond investor is the same: Rising interest rates reduce existing bond values and falling interest rates increase existing bond values.

Not exact matches

«Rising interest rates and stricter mortgage requirements have reduced home buyers» purchasing power, particularly for those at the entry level of our market,» Jill Oudil, president of the Real Estate Board of Greater Vancouver, said in a statement.

Government bonds could help reduce default risk, but because of the length of maturity required to earn any meaningful yield, they do little to reduce duration risk - i.e. the overall sensitivity of a portfolio to interest rate rises.

As inflation rises and Federal Reserve interest rates go up correspondingly, many investors are reducing their stock holdings to maintain a healthy bottom line.

STEVE LIESMAN, NIGHTLY BUSINESS REPORT CORRESPONDENT: The latest CNBC Fed survey finds expectations for interest rates and inflation both rising, while the outlook for the stock market has been reduced yet again.

They include upwards revisions in economic forecasts, expectation of monetary tightening, rising real and nominal long - term interest rates, fiscal stimulus on a huge scale in a full employment economy, rising protectionism that should choke off import flows, and tax reform directed at reducing capital outflows and increasing capital inflows.

First, substantial direct or indirect wealth transfers from the state sector to Chinese households will unleash a surge in household consumption as household income rises (and because the interest on bank deposits is an important source of income for most middle and lower middle class households, if the authorities reduce interest rates, as struggling borrowers are demanding, China actually moves in the wrong direction).

To reduce your portfolio's sensitivity to rising interest rates you want to lower the average duration of your holdings.

I'm assuming you're planning to hold until maturity, since the rising interest rate environment will reduce the price of the bonds, should you decide to sell.

Similarly, when interest rates fall, the price will rise to reduce the yield and once again make it market competitive.

Increases in interest rates mean costs rise, profits fall and share prices are reduced.

When and if interest rates begin to rise, corporates may have the incentive to tilt their capital structure back to equity, or at least to reduce stock repurchases, which could raise further questions about stock market valuations.»

Rising interest rate is the biggest risk for CubeSmart, which reduces the attractiveness of investing in REITs.

The first effect is that rising inflation can cause the U.S. Federal Reserve — or any country's central bank, for that matter — to raise short - term interest rates to reduce the demand for credit and help prevent the economy from overheating.

Although it makes sense to me to use bonds to try to reduce risks and volatility, what about the possible downward slide of bond values as interest rates rise over the next few years?

In contrast, the Bank of Korea reduced interest rates by 25 basis points in November, for the second time in six months, reflecting continued weak domestic demand and a rising exchange rate.

Given term premium suppression (via QE) reduced volatility and induced investors to buy risky assets to boost returns, a sustained rise in long - term interest rates would give investors more options to achieve yield targets, thus making risk assets appear less attractive and ultimately erode demands for yield and tighten financial conditions.

While falling world interest rates have reduced the servicing cost of foreign debt over the past two years, this has been offset by rising dividend payments on foreign holdings of Australian equity, reflecting the strong profit growth of Australian companies throughout this period.

In this environment, rising interest rates could spell trouble for indebted consumers who have already reduced their spending (as evidenced by the recent slump in retail sales).

When liquidity in the financial system is reduced, interest rates tend to rise and / or stay high.

Yet rising interest rates from the Federal Reserve have reduced the amount of loan origination activity in some quarters, and that has the potential to put pressure on companies that benefit from that activity.

In addition we have rising interest rates, crowding out of the private sector, reduced business confidence, and declining economic growth.

The wild card is the foreign investors; if more countries revalue their currencies upward versus the dollar, reducing exports to the US, and reducing the need to buy our debt, then interest rates could easily rise by another percent.

Going into 2014, investors held the view that interest rates would rise and, thus, they looked to reduce interest rate risk with the more flexible non-traditional bond funds.

If you fear rising interest rates, the prudent strategy is to reduce the duration of your bond portfolio.

With fixed income you can never totally protect yourself from rising interest rates and inflation, but you can reduce the impact.

This method can help to accelerate the reduction of the current loan principal amount, reducing future potential interest costs in the event of the rate indices rising.

Also keep in mind that flexible bond strategies have the potential to outperform in rising and flat interest rate environments, and can help provide meaningful diversification, which may reduce overall volatility in a portfolio.

A booming economy reduces corporate risk and lowers the risk premium - so the interest rates of Treasuries may rise more than Corporates - leading to less impact on Corporate bond's pricing.

Jason Vaillancourt, Co-Head of Global Asset Allocation, discusses the impact of rising rates on corporate ability to reduce interest expenses.

«The theory is when you're in a rising interest rate environment, that's typically a signal of a stronger economy, and that reduces default risk and improves the relative performance of those non-core fixed - income assets,» he says.

Interest rates and bond values have an inverse relationship; rising interest rates will reduce the value of existing bonds while falling rates will increase theiInterest rates and bond values have an inverse relationship; rising interest rates will reduce the value of existing bonds while falling rates will increase theiinterest rates will reduce the value of existing bonds while falling rates will increase their value.

By swapping those assets that are currently trading below the purchase price (due to a rise in interest rates, deteriorating credit situation, etc.) you can reduce or eliminate the capital gains you would otherwise have paid on your other profitable transactions in the current tax year.

See related: 5 ways to cut your card debt as interest rates rise, 3 strategies for reducing debt on multiple cards

He discussed the likelihood of interest rates rising and suggested that investors who want to hold bonds reduce their duration or take it to zero.

With the prospect of rising interest rates and the generally accepted perception that the new administration will reduce regulations investors have bid up bank stocks to levels we haven't seen since before the 2008 financial crash.

«Rising interest rates and stricter mortgage requirements have reduced home buyers» purchasing power, particularly for those at the entry level of our market,» Jill Oudil, REBGV president said.

But like the Haqs, Balfour has built in a buffer: if rising interest rates put pressure on her, she could just reduce the optional mortgage payments she's making now.

Rising interest rates ruthlessly reduced the value of all existing fixed - coupon investments.

To the extent the interest rate on your debt can also rise, you would save money by reducing your debt.

May reduce U.S. interest rate risk by holding short term bonds, which are generally less sensitive to rising rates.

The leap in income was primarily due to reduced fee waivers, which were reversed as rising interest rates led to higher returns for money market funds.

Aims to protect against rising rates by reducing the portfolio's potential for concentrated interest rate risk

By following your guide, you can reduce your overall mortgage costs and mitigate against rising mortgage interest rates!

contributing to global sea level rise is an interesting phrase considering that the rate of sea level rise has been reduced for the last several (5?)

Interest rate risk, for example, can be reduced (or eliminated) if the lender puts a cap on how high the interest rate can rise, or if it offers a fixed intereInterest rate risk, for example, can be reduced (or eliminated) if the lender puts a cap on how high the interest rate can rise, or if it offers a fixed intereinterest rate can rise, or if it offers a fixed interestinterest rate.

Sales are being driven by strengthening fundamentals — the improving jobs picture, rising rental rates, continuing low interest rates and housing affordability — and prices are gaining on reduced supply.

If interest rates rise 1 percent and all other economic factors remain the same, purchasing power for homebuyers will decrease by just over 11 percent; therefore, every quarter - percent (0.25 percent) rise of interest rates reduces homebuyer purchasing power by 3 percent.

«From a housing market perspective, tight inventory is boosting prices in many markets, and millennial homebuyers must now contend with rising mortgage interest rates reducing their buying power,» says Tendayi Kapfidze, chief economist at LendingTree.

While rising interest rates can reduce the value of future cash flows, inflation can in turn increase the value of physical property due to the fact that real estate is a hard asset.