Sentences with phrase «about interest rate risk»

Read more about interest rate risk.

While it is understandable that market participants are concerned about interest rate risk in a rising rate environment, it is interesting to note that the high yield bond sector stands out within the fixed income market with less rate sensitivity.

They are also good risk management tools for investors worried about interest rate risk.

But it is confusing that the article takes a tangent from index - linked gilts into plain vanilla gilts (like the UK Gilt Treasury 4.5 % 2034 you mention) and then talks a lot about interest rate risk.

The fact that rates have been so low for so long, but are rising at the moment, has investors really nervous about interest rate risk.

Not exact matches

About the only time interest rates pose a substantial risk of precipitating a crash is when central banks become concerned about overheating in the economy and are willing to provoke a recession to cool thingsAbout the only time interest rates pose a substantial risk of precipitating a crash is when central banks become concerned about overheating in the economy and are willing to provoke a recession to cool thingsabout overheating in the economy and are willing to provoke a recession to cool things off.

As the New York Times points out, investors typically prefer to obsess about interest rates and financial risks.

«The conversation about equity risk premium, interest rates and inflation, we are coming full circle.»

With the global economy «floating on an ocean of credit,» the current acceleration of credit via central bank policies will likely produce a positive rate of real economic growth this year for most developed countries, PIMCO chief Bill Gross writes in his latest monthly commentary, but «the structural distortions brought about by zero bound interest rates will limit that growth and induce serious risks in future years.»

Although some are concerned about potential inflation and higher interest rates, we still enjoy an environment of synchronized global economic growth and muted macro risks.

Such complications can mask the effect of other forces that might otherwise find expression in risk premiums or interest rates: forces, for example, associated with the concern about fiscal sustainability in the United States or the sustainability of our external imbalances.

Since bond prices fall as interest rates rise, this possibility has many investors worried about their exposure to interest rate risk.

In other words, when markets are volatile and there are worries about a recession, interest rate exposure can help offset credit risk in a fixed income portfolio.

This makes sense given how bonds are structured, but I think many investors miss this point when they worry about the potential risks from rising interest rates.

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.

The recent burst of volatility has been unnerving, but it is important to remember that the macro environment of synchronized economic growth and muted macro risks remains solid, although some are concerned about potential inflation and higher interest rates.

Put simply, even taking account of current interest rate levels, and even assuming that stocks should be priced to deliver commensurately lower long - term returns, we currently estimate that the S&P 500 is about 2.8 times the level at which equities would provide an appropriate risk premium relative to bonds.

It also provides more certainty about the path for short - term interest rates, reducing the risk premium built into longer - term rates.

As the Fed tapers, many observers worry about the effect on the stock market, while others are worried about the risk of inflation or deflation and everybody is worried about the effect of higher interest rates on economic growth and for the bond market.

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?

As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.

ETF.com: What about interest - rate risk?

And if I hold a corporate bond, there are both interest rate risk and credit risk to worry about.

As we covered this spring (WILTW May 25, 2017), the International Monetary Fund's annual Global Financial Stability report included a stark warning about the health of the U.S. economy: 22 % of U.S. corporations are at risk of default if interest rates rise.

For example, if I own a Treasury bond, something I should care about is my exposure to interest rate risk because it determines how my bond performs.

What we're seeing here — make no mistake about it — is not a rational, justified, quantifiable response to lower interest rates, but rather a historic compression of risk premiums across every risky asset class, particularly equities, leveraged loans, and junk bonds.

IGHG broadly succeeds in delivering its strategy, making it an interesting option for investors concerned about rate risk.

To reduce this risk, lenders may offer loans with prepayment penalties at a lower interest rate — about.125 percent to.375 percent lower.

This extended period of extremely low interest rates worldwide has led some to worry about the risks of owning bonds, particularly if interest rates rise sharply.

«There are concerns about the effects of persistently low interest rates and the quantitative easing that other countries have done, in terms of increasing risk - taking by financial market players and individuals.

It's not just about reducing interest - rate risk and duration, it's about sticking to what you are trying to achieve in your overall portfolio.

In this explainer on duration, Matt talks about some of the risks and opportunities in a potentially rising interest rate environment.

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.

Given that our crystal balls are opaque for predicting interest rates, I thought it would be interesting to continue my interview with two financial advisors about managing interest rate risk in the municipal bond asset class.

For more information about bonds, see our Investor Bulletins on municipal bonds, corporate bonds, high - yield corporate bonds and interest rate risk.

Learn about the major risks for the bond market in 2016; interest rate increases, high - yield bond volatility and a flatter yield curve may be issues.

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.

In other words, when markets are volatile and there are worries about a recession, interest rate exposure can help offset credit risk in a fixed income portfolio.

It is a great place to learn about building your credit history, and getting your credit reports and scores; using credit, including credit cards, loans, and interest rates; the risks of using more expensive credit options like payday loans and car title loans; and managing debt — from better budgeting to dealing with debt collectors.

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.

Although some are concerned about potential inflation and higher interest rates, we still enjoy an environment of synchronized global economic growth and muted macro risks.

And so this lengthening of maturities and lengthening of duration has caused these indices to be more interest rate sensitive and some cases, more interest rate sensitive than they've historically ever been, and so by being flexible and not using that as the basis for thinking about the risk of one's investments, what you can do is reduce the interest rate sensitivity of your fixed income portfolio.

If you're going to buy bonds then you should familiarize yourself with their interest rate risk, maturity, etc. and be reasonable about your time horizons.

The amount of money you borrow tells your lender a lot about your level of risk — and it has a big impact on your interest rate.

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.

If they do try to tinker about with their freedom a little bit, you can bet your bottom dollar that they will still be charging high interest rates to take a little bit of the risk of themselves.

This article will present my personal perspectives on interest rates and their potential impact on stock Read more about The Threat and Risk of Rising Interest Rates: Separating Fact from Fiction -interest rates and their potential impact on stock Read more about The Threat and Risk of Rising Interest Rates: Separating Fact from Fiction -LSBrates and their potential impact on stock Read more about The Threat and Risk of Rising Interest Rates: Separating Fact from Fiction -Interest Rates: Separating Fact from Fiction -LSBRates: Separating Fact from Fiction -LSB-...]

The great thing about this option is that it is risk - free since your preferred insurance firm assumes all the responsibility and risk, thus guaranteeing you the stated interest rate.

(Morningstar.com: Sep 19, 2014) ProShares» Simeon Hyman talks about using hedged fixed income alternatives to divorce the interest rate risk decision from the credit risk decision.