This will sound weird, but I am not as much worried
about government bond rates rising, as I am with credit spreads rising.
Not exact matches
The interest
rate on 10 - year
bonds was 1.79 % at the end of 2014 —
about half as much as the federal
government had to offer to get investors to buy its debt a decade ago.
Consider these risks before investing: The value of securities in the fund's portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general financial market conditions, changing market perceptions, changes in
government intervention in the financial markets, and factors related to a specific issuer, industry, or sector and, in the case of
bonds, perceptions
about the risk of default and expectations
about changes in monetary policy or interest
rates.
While spreads between yields on highly -
rated corporate
bonds and
government bonds have remained above their historical averages, this continues to reflect strong demand for Commonwealth Government bonds rather than concerns about corporate credi
government bonds have remained above their historical averages, this continues to reflect strong demand for Commonwealth
Government bonds rather than concerns about corporate credi
Government bonds rather than concerns
about corporate credit quality.
For «A»
rated corporates, the spread over
government bonds of comparable maturity is currently
about 100 basis points, which is noticeably wider than a couple of years ago (Graph 32).
Australian
government bonds gainedon Fridayafter the Reserve Bank of Australia (RBA) provided no hint of near - term interest
rate hike, also, hinting that inflation is
about to remain low for some time.
Using monthly levels of Moody's yield on seasoned Aaa corporate
bonds and the Dow Jones Industrial Average (DJIA) during October 1928 through February 2018 (
about 90 years) and monthly levels of the 10 - year
government bond interest
rate and the stock market from Robert Shiller during January 1871 through February 2018 (
about 148 years), we find that: Keep Reading
Since
governments tend to have AAA
bond ratings - the risk is
about as low as cash and so DJClayworth's answer comes into effect: Bob gives Sue cash to give to Mary.
Namely,
bond coupon payments are determined by market interest
rates, the type of issuing entity (
government bonds pay lower coupons than corporate
bonds because of lower default risk), the creditworthiness of the issuing entity (AAA companies pay lower coupons than CCC companies), and the maturity of the
bond, which we will talk
about next.
Wong wants a return potential of
about 3 % to 5 % higher than the
government bond rate, which puts him into the 5 % to 7 % annual return range.
Consider these risks before investing:
Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions
about the risk of default and expectations
about monetary policy or interest
rates), changes in
government intervention in the financial markets, and factors related to a specific issuer or industry.
While CDS
rates reflect concerns
about Japan's fiscal condition, low
bond yields show that investors see a dearth of viable alternatives to Japanese
government debt.
Asset prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including, in the case of
bonds, perceptions
about the risk of default and expectations
about monetary policy or interest
rates), changes in
government intervention in the financial markets, and factors related to a specific issuer, industry or commodity.
Stock and
bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including, in the case of
bonds, perceptions
about the risk of default and expectations
about monetary policy or interest
rates), changes in
government intervention in the financial markets, and factors related to a specific issuer or industry.
Stock and
bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including, in the case of
bonds, perceptions
about the risk of default and expectations
about changes in monetary policy or interest
rates), changes in
government intervention in the financial markets, and factors related to a specific issuer or industry.
Bond prices may fall or fail to rise over time for several reasons, including general financial market conditions, changing market perceptions (including perceptions
about the risk of default and expectations
about monetary policy or interest
rates), changes in
government intervention in the financial markets, and factors related to a specific issuer or industry.
Makes sense, I guess — we're really talking
about Irish
government risk, so these
rates are a bargain for the banks vs. Irish
bond yields!
An interesting article on diversifying the current trust fund to include stocks as well as
government bonds to increase the
rate of return that Paul complains
about and lessen the danger pointed out by Foobarista.
Government bond market fluctuations have renewed concerns
about rising mortgage
rates and may prompt borrowers to take more notice of what mortgage lenders are charging on a local level.
Consider these risks before investing: The value of securities in the fund's portfolio may fall or fail to rise over extended periods of time for a variety of reasons, including general financial market conditions, changing market perceptions, changes in
government intervention in the financial markets, and factors related to a specific issuer, industry, or sector and, in the case of
bonds, perceptions
about the risk of default and expectations
about changes in monetary policy or interest
rates.
This was when stock markets were averaging 15 % annually, 3 % GDP growth was considered a bad year,
government bonds yielded between 5 % and 10 %, the highest marginal tax
rate on ordinary income was ~ 70 %, just
about the only way to invest was to pay a full - service stockbroker over 5 % commission to buy a stock or a mutual fund, and inflation was averaging 4 % to 8 % annually.