While the bond market continues to foreshadow a very weak economic recovery
risky asset investors can't get enough.
Not exact matches
More specifically,
investors have sought the potential for higher returns from
riskier assets like private company stocks, as safer investments like T - bills and bonds pay out next to nothing.
European markets closed marginally higher on Tuesday as tensions between the U.S. and North Korea showed signs of subsiding, prompting
investors to return to
riskier assets.
Older
investors may want to move that money into
assets that are even less
risky, like cash or annuities.
Assets such as gold and U.S. Treasurys — considered less
risky options by many
investors — rallied immediately after the president's comments.
Asian shares edged higher on Friday, turning positive for the year, while the US dollar weakened broadly after the Federal Reserve's cautious stance on further rate increases prompted
investors to rebuild their bets on
riskier assets.
Benchmark spot gold prices were on course for an over 1 percent decline this week, pressured by a thaw in tensions on the Korean peninsula and a stronger dollar as
investors looked to
riskier assets such as equities.
But taking out debt to buy an
asset as volatile as Bitcoin — as some
investors seem to be doing with their credit cards — is
risky on a personal finance level.
In this case, emerging markets have suffered the most as
investors fled
risky assets for the safety of U.S. government treasuries.
NEW YORK U.S. stocks ended mixed on Wednesday while most other global shares rose, as
investors were drawn to
riskier assets because of upbeat earnings from companies in Europe and the United States.
While the real deal may lead to LP defaults (and another outcome we discussed here), deteriorating perceptions alone can spur
investors to preemptively batten down the hatches and shift funds into less
risky assets.
While
investors are often concerned about catastrophic risks, failing to allocate enough to
risky assets can lead
investors to «fail slowly» by not maintaining pace with inflation or supporting withdrawal rates.
I suspect that many
investors sold their
risky assets especially in the financial sector and mitigated into these companies.
These companies allow
investors to make
riskier investments but say they play no role in vetting the actual
assets.
Somehow, we have concluded that unaccredited
investors should be able to likely lose their hard - earned money by investing in the most
risky of
asset classes.
Young
investors or
investors with long time frames should hold a higher proportion of stocks or
risky assets than older
investors or
investors with short time frames.
Longer time horizons mean
investors can benefit from higher returns of
riskier assets like stocks, while weathering short - term volatility.
As global
investors continue to reprice expectations for structural reforms in the US and Europe, capital will continue to migrate into growth
assets and safe - haven investments as an alternative to markets perceived as
riskier.
This very low market volatility can lead
investors to take on more risk, and in a period of still relatively low interest rates, to «reach for yield» — that is, buy
riskier assets than one would otherwise, in order to achieve a desired profit or savings goal.
With fears fading over U.S. military intervention in Syria,
investors who had sought shelter in Treasurys switched back into
risky assets.
Rising U.S. debt supply and the pace of the U.S. Federal Reserve's tightening, the possibility the European Central Bank's quantitative easing program is heading towards the finish line, and concerns about the credit quality of
riskier asset classes restrained
investors.
The endgame was to force
investors into
riskier assets, [e.g. junk bonds, equities, real estate], create a wealth effect, and stimulate the economy.
Losses in
risky assets will dissipate
investor confidence, undermine economic activity, and leave the Fed with little choice other than to step on the accelerator for more easy money.
After all, the cornerstone of coordinated central - bank policy since 2008 has been the levitation of financial
assets via Zero Interest - Rate Policy (ZIRP) and Quantitative Easing (QE) by forcing
investors into
risky assets.
Correlation relates to the fact that a low volatility environment encourages
investors to move into
riskier assets to get decent returns on their investments.
David agrees that low interest rates push
investors to
riskier assets but also insists that it is one of the points of having an expansionary monetary policy.
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.
Investors delved into
riskier assets a day after China's National Bureau of Statistics reported that factory output increased...
Central bank intervention in global bond markets has «crowded out» many traditional fixed income
investors, driving them to seek yield and income from non-traditional and
riskier asset classes such as high yield, emerging markets debt, leveraged loans and private credit.
A lack of lower - risk income sources since the financial crisis forced
investors toward
riskier assets, raising the demand for these
assets amid relatively fixed supply.
This means
investors who want higher returns must consider taking on greater risk — by increasing leverage or moving into
riskier asset classes.
There are some tentative signs that
investors have been scaling back their exposure to relatively
risky assets (Graph 18).
Historically, over long periods of time, money invested in
riskier assets such as stocks has generally rewarded
investors with higher returns than funds invested in ultra safe and liquid
assets.
Seth Carpenter, Selva Demiralp, Jane Ihrig and Elizabeth Klee find that some categories of
investors appear to sell U.S. Treasuries to the Federal Reserve and rebalance toward
riskier assets (corporate bonds, commercial paper, and municipal debt).
Here and now, it's very true that the S&P 500 is a
risky asset, but it's madness to imagine that adding more of it to a portfolio will increase expected return, except for
investors with very long horizons.
Although recently rising prices for stocks, high - yield bonds, commodities and other
riskier assets would suggest otherwise,
investors remain skittish over the still unresolved and quite concerning risks facing financial markets, such as the U.S. presidential election, the potentially prolonged post-Brexit renegotiations, Italian bank solvency and a slowing China.
With 10 - year Treasuries yielding less than 2 % today (from Bloomberg data),
investors unwilling to accept such low income may need to direct their investments across
riskier assets in the search for yield.
Indeed, history has shown that when prices for risk - free
assets (like Treasuries) fall to attractive levels,
investors often sell their
risky assets and purchase Treasuries.
Investors increase risk exposure for potential return, adding exposure to EM equities and other
risky assets.
The low interest rate environment makes it difficult for savers to meet their return ambitions without stepping out of deposits and becoming
investors in
riskier assets.
Investors tend to be trend followers, so yes, as redemptions pile up at hedge funds,
risky assets will get liquidated.
When reading «The Intelligent
Investor» they claim that you can increase you position to 100 % stocks (
risky) if you meet a number of criteria, one of which is liquid
assets to pay for living expenses for 1 year.
However, the high correlation between
risky assets experienced recently like during the recession of 2001 - 2003 and the global financial crisis in 2007 - 2009 has caused many
investors to reconsider allocating by traditional
asset classes defined by security type like stocks, bonds and real estate or commodities.
In financial theory,
riskier investments are expected to be more profitable because investments normally offer a reward in exchange of risk absorption — if they offered no reward,
investors would buy the less -
risky assets instead.
A continuing low interest rate policy of the Federal Reserve that encourages
investors to seek higher returns in
riskier assets.
That might help explain why
investors - though not avoiding
risky assets altogether - seem to be turning more selective.
Young
investors or
investors with long time frames should hold a higher proportion of stocks or
risky assets than older
investors or
investors with short time frames.
So
investors may be reconsidering what to pay for
risky assets.
However, I'm concerned when people tell
investors they «need to invest more in
assets that are
riskier.»
Markets are experiencing an intense case of risk off sentiment, as
investors flee from
riskier assets in pursuit of safe havens.