Sentences with phrase «when equities yield»

When equities yield less than bonds, they still usually have the higher expected returns.

Not exact matches

When you purchase a broad swath of equities, say an S&P 500 index fund, the returns you can expect over the next decade or so comprise four building blocks: the starting dividend yield, projected growth in real earnings per share, expected inflation, and the expected change in «valuation» — that is, the expansion or contraction in the price / earnings (P / E) multiple.

The report said that equities have only come under pressure when the two - year Treasury yield rose above 3.5 percent.

Dividend stocks that yield more When it comes to equities, high - paying dividend stocks, especially in the utility and REIT sectors, have been the go - to investment of late.

On Monday, investors rushed into Treasuries as the S&P 500 and Dow Jones Industrial Average nosedived more than 4 percent - reversing a move on Friday when a spike in bond yields, which move inversely to prices, triggered an equity rout.

However, when considered as an alternative to classic equity financing, token sales yield a > 100X increase in the available base of buyers and a > 1000X improvement in the time to liquidity over traditional methods for startup finance.

Bonds have never been a part of my portfolio given the historical lower yield when compared with equities.

Is n`t — do n`t you think there will come a time when the yield on the 10 year will start to provide some competition from the yields in the stock market and that will have a problem for equity investors?

When the stock market dividend yield yields more than a 10 - year US treasury bond yield, it's generally a good sign to invest in equities.

At the same time, some 70 per cent of government - issued bonds are yielding 1 per cent or less, and when you combine the equity / bond value of the 15 largest global markets they've never been more expensive.

This is especially true on the downside because high yield investors typically are «privy» to bank credit information — trust me, this is true, as our high yield desk was next to the bank debt trading desk and we were very friendly with each other — and can see when corporate numbers are deteriorating well in advance of equity analysts and investors.

I think equity investors are making the same mistake today when they look to the alleged safety of high - yield stocks.

We are now at a time when equities are relatively expensive, bond yields are relatively low.

When an individual without financial sophistication is faced with a choice between equity and fixed - income funds, international or domestic, large - cap or small - cap, high - yield or treasury bonds, they face choice - overload and the decision can be overwhelming.

Although decades of history have conclusively proved it is more profitable to be an owner of corporate America (viz., stocks), rather than a lender to it (viz., bonds), there are times when equities are unattractive compared to other asset classes (think late - 1999 when stock prices had risen so high the earnings yields were almost non-existent) or they do not fit with the particular goals or needs of the portfolio owner.

If this bond - equity relationship remains unstable when yields are at risk of climbing further, long - term Treasuries may not play their traditional portfolio diversifying role.

Outside of the 1980 bond performance (when yields dropped from nearly 14 percent to 9.5 percent), the two most recent equity bear market performances by bonds really stand out.

When investors look for less yield and more total return (capital appreciation) in certain asset classes, the equity sensitivity also plays an increasing role in absolute risk.

A sobering example of the downside this can foster was in 2008 when equities dropped 50 % from peak to trough and high yield bonds also fell 40 %.

Higher risk (higher yield) bonds tend to be closely correlated with equities which means that such bonds do not really dampen volatility or smooth out returns over time when combined with equities in a portfolio.

Specifically, the «Fed Model» — the notion that equity earnings yields and 10 - year Treasury yields should move in tandem — is an artifact restricted to the period between 1980 and 1997, when both equity and bond yields fell in virtually one - for - one lock - step — bond yields because of disinflation, and equity yields because of what was actually a move from extreme secular undervaluation to extreme secular overvaluation.

Market Killer When rates are low, investors reach for yield beyond what seems logical, according to a study outlined in The Wall Street Journal, which concluded that if rates rise and investors revert to less risky portfolios, equities could «be in for a big drop.»

I used to think it must have been easy to be an equity investor back in the 1950s when the dividend yield on the S&P 500 exceeded the yield on ten - year Treasuries.

When it comes to equity income investing, there are generally two broad schools of thought: The first seeks out those stocks paying the highest dividend yields.

An easy rule of thumb I use is to start asset allocating more into equities when the S&P 500 dividend yield is equal to or greater than the 10 - year yield.

Lower rates do indeed lead to higher equity multiples, but only up to a point: When yields get very low, as they are today, the relationship breaks down.

When CYH was launched in January 2008 it had a yield of almost 9 %, but that year it lost about 41 % — of course, so did a lot of other equity funds.

Traditionally, high - yielding equity investments like REITs and utilities are said to suffer when interest rates rise.

But when articles cite the yields of Equity REITs (from NAREIT) they usually compare it to the 10 - year Treasury to ascertain cheapness / dearness.

In fact, when looking at the earnings yield relative to real bond yields — the equity risk premium (ERP)-- investors are still being well compensated for risk in many corners, we believe.

The Fund may engage in active and frequent trading of portfolio securities to achieve its investment objective... the Fund will invest in a portfolio of securities including: equities, debt, warrants, distressed, high - yield, convertible, preferred, when - issued... options, total return swaps, credit default swaps, credit default indexes, currency forwards, and futures... ETFs, ETNs and commodities.»

With the 10 - year Treasury hovering around 3 % and the prospect of loss of principal one bonds when rates do rise eventually, the prospect of equities with yields greater than bond yields becomes particularly appealing.

By setting up a reverse mortgage you can draw from your home's equity instead of your 401 (k) plan or IRA in times of low investment returns.5 So, when the stock market is yielding low returns, you can live off of the money from your reverse mortgage while allowing your investment portfolios to recover.

By setting up a reverse mortgage early in retirement, borrowers are able to draw from their home's equity instead of their 401 (k) plans or IRAs in times of low investment returns.3 So, when the stock market is yielding low returns, these retirees use the money from their reverse mortgages to live off of while allowing their investment portfolios to recover.

Secondly, when investors begin to seek yield from two very different asset classes — fixed - income investments vs. equities — rising stock prices follow as investors bid down a yield to match alternatives.

At a time when, as we have discussed in articles such as Theory and practice, the IA is consulting on an appropriate yield requirement for UK Equity Income funds and the UK market yield is becoming increasingly concentrated, this matter requires careful consideration.

Investors seek more risk in equities as bond yields get low... And higher equity valuations make bond investors believe it's just as safe as it was before when both debt and equity valuations were lower (and objectively less risky).

Likewise, when purchasing high dividend - yielding equities, the challenge is to find high - quality companies at reasonable prices.

That is one reason why, at times, market participants look to the equity markets as much as the fixed income markets when studying high yield.

In my 8 years on the buy side, in distressed and high yield land, I have never seen a more consensus long than Visteon's when issued equity.

I don't include the cash when calculating yield (yield is calculated out of a the total of equity positions).

This cycle will turn when the cash flow yield of assets reaches levels people can make money on in the worst environments; where equity funds new projects with no debt, and the profit is obvious.

When one has to give up 1.2 % in yield to move from safe Treasuries to risky REIT equity, there is something amiss.

In fact, when looking at the asset class yields of bonds, preferreds and common equity, one can see that preferreds offer the highest yields.

Considering the low yield bond investors are earning during sunnier days for equity - only investors, when the storm comes, that outcome would be particularly painful.

Outside of the 1980 bond performance (when yields dropped from nearly 14 percent to 9.5 percent), the two most recent equity bear market performances by bonds really stand out.

The high yield market has had a positive correlation with equity markets for many years when comparing the percentage change in spreads (over Treasuries) for key high yield indices vs. the percentage change in level for equities, and this correlation has become even more pronounced since the global financial crisis.

The default risk of high - yield bonds is still relatively small when compared with the risk of investing in equities, so for many investors, high - yield bonds and bond funds occupy a strategic space between stocks and less risky bonds.

When yield spreads are very high, future equity returns are high, because returns come as spreads tighten.

That was the only other period when bonds outperformed equities over 10 years, and the S&P dividend yield was higher than the 10 year Treasury yield.