Sentences with phrase «because bond rates»

We live in an era of lower returns, because bond rates are lower and interest rates are lower generally.

Not exact matches

Only two years ago they were rating AAA all the toxic bonds that created the crisis,» said Greek Prime Minister George Papandreou, adding that the downgrade was executed «not because of what Greece is doing but because of the decisions being taken by the EU that are not considered as going far enough.»

That means that losers will be investors who bought 30 - year, fixed - rate bonds, because those values will go down.

In a client note on Thursday titled «Yanking down the yields,» the interest - rates strategist projected that bond yields would be much lower than the markets expected because central banks including the Federal Reserve were reluctant to raise interest rates.

As the business sector accumulates more surplus cash, it has the effect of driving down interest rates because there's less demand for corporate bonds and other forms of business lending.

But, «the U.S. and the Bank of England have gone to more extremes because they have interest rates below the Bank of Canada's, and they've also been buying bonds to lower longer term interest rates,» Shenfeld added.

I've heard phrases like «I do not want to invest in bonds now because interest rates are going up» practically every day for the past seven years.

Timmer: Yeah, so last August which was a key inflection point for the market — because at that point, nobody was expecting tax cuts anymore and the 10 - year Treasury had fallen to 2 %, and the bond market which of course is always pricing in the potential future, was pricing in only one more rate hike over the subsequent two years.

Alternatively, it's best to shorten the average term to maturity of your bond portfolio as interest rates enter into a rising cycle, because the shorter the term, the less their price will be affected.

Beyond the requirements that liquidity and regulators impose on us, we will purchase currency - related securities only if they offer the possibility of unusual gain — either because a particular credit is mispriced, as can occur in periodic junk - bond debacles, or because rates rise to a level that offers the possibility of realizing substantial capital gains on high - grade bonds when rates fall.

She might equally assume the five - year bond is less volatile because it has the higher coupon rate.

«I think the pressure [to increase interest rates] will be there, because the Fed in the U.S. should stop printing money, and taper off as they say,» Mr. Flaherty, referring to the dialling back of U.S. bond - buying, told CTV in an interview aired Sunday.

At the moment, the ECB can not purchase Greek bonds because they do not have an investment grade rating.

Tactical cash is extra cash you intentionally hold from time to time either because cash rates are so high that they're attractive, or because the prospects for bonds and equities are so negative that you'd rather withhold capital from those two asset classes for the time being.

To oversimplify a bit, stocks are tax - efficient (because they're taxed at the lower capital gains and dividend rate and taxes are deferred until you sell) and bonds are not (they're taxed much like a savings account).

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.

Betterment recommends its clients put their emergency funds in a portfolio with between 30 percent and 40 percent in stocks and the rest in a diversified allocation of bonds because interest rates are so low, Holeman said.

Not just because interest rates are low but because bond indexes have greater interest - rate risk, coupled with a tiny buffer to help offset losses.

The problems is that it's not exactly an apples - to - apples comparison with stock returns because bonds are more or less driven the starting interest rate.

The bond rating is an important process because the rating alerts investors to the quality and stability of the bond.

When rates rise, this is a huge plus for bond funds because they can continuously reinvest at higher rates, which offsets some of the sting you get from the price decline.

Because most wealthy Chinese seem to think about RMB in terms of USD or Hong Kong dollars, it is the fear that any depreciation of the RMB against those two currencies (the Hong Kong dollar is pegged to the USD through a modified currency board) greater than the couple of percentage points interest rate differential would yield less than equivalent USD or Hong Kong dollar bonds.

Rates affect bond investments, but they also affect all other investments in some form or another because higher rates mean that investors have other options in which to invest (dividend and REIT investors know this all too well in the recent rate increRates affect bond investments, but they also affect all other investments in some form or another because higher rates mean that investors have other options in which to invest (dividend and REIT investors know this all too well in the recent rate increrates mean that investors have other options in which to invest (dividend and REIT investors know this all too well in the recent rate increase).

The 10 year maturity U.S. Treasury Note (UST 10 yr) is thought to be the primary benchmark for the U.S. bond market because it has the largest issuance and is used as the basis for fixed rate mortgage pricing.

When rates rise, bonds drop in value because fixed income buyers prefer investing in new bonds with higher yields.

This is all because the central tenet of the old playbook — the Fed buys bonds, forcing interest rates down and stock prices up — is being rewritten.

Bonds, stocks and real estate, he writes, are overvalued because of near zero percent interest rates and a developed world growth rate closer to zero than the 3 % to 4 % historical norms.

That will be important to private investors, because if the central bank held itself out as a privileged bondholder, effectively passing more risk on to other bond holders, other buyers might undermine the stimulus program by demanding higher interest rates.

In fact, long bonds are in the midst of a correction as we speak because interest rates have finally risen over the past couple of months.

Advice: Because bonds with longer maturity face greater risk of changing interest rates (and greater default risk, as...

Entities in smaller markets typically issue foreign currency debt in offshore bond markets because they can issue larger, lower - rated and / or longer - maturity bonds than they can (at least at comparable prices) in their domestic market.

Second, because we sought a rating for the bond, not the lending program or the institution, we were unable to concentrate the lending in the communities that need it the most.

: A classic point of contention for risk parity is that interest rates, in general, are too low, and that while the approach may have performed well in the past, it is only because of an historic bond rally, which is unlikely to happen again.

That is hard to achieve, because, well... bonds have interest rate risk!

Advice: Because bonds with longer maturity face greater risk of changing interest rates (and greater default risk, as well), they typically pay higher interest rates.

Generally, the higher the duration, the more the price of the bond (or the value of the portfolio) will fall as rates rise because of the inverse relationship between bond yield and price.

If this doesn't underscore that longer - term bond yields don't have to rise just because the Fed hikes rates, we're not sure what would.

Because investors are being asked to assume this risk, high yield bonds tend to come with higher coupon rates, which can generate additional investment income.

A downgrade in the credit rating of a bond by the credit agencies can affect bond performance as well if institutional investors are forced to sell because of restrictions on the credit quality of the bonds they're able to hold.

Because credit and default risk are the dominant drivers of valuations of high yield bonds, changes in market interest rates are relatively less important.

As we've also mentioned before — and as this year's bond market behavior emphatically demonstrates — longer - term bond yields don't have to rise just because the Fed is hiking rates.

That's because many of the benefits of bond ladders — such as an income plan and managing interest rate and credit risk — are based on the idea that you keep your bonds in your portfolio until they mature.

«Laddering bonds may be appealing because it may help you to manage interest rate risk, and to make ongoing reinvestment decisions over time, giving you the flexibility to invest in different credit and interest rate environments,» says Richard Carter, Fidelity vice president of fixed income products and services.

Bonds are subject to the risk that an issuer will fail to make payments on time and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments.

It was problematic because many of those bonds were purchased a time when interest rates were much higher and enjoyed far fatter bond coupons than anything then available on the market.

Interest rates have continued to be pushed lower and lower and lower and most of this is because the Fed keeps on adjusting that federal fund's rate and adjusting interest rates down in the way that they do that is by putting cash into the market and buying back bonds or short - term bonds with the federal fund's rate.

Existing bonds or bond fund values, however, will drop as interest rates rise because investors can get higher rates on newly issued bonds.

At the same time, rising rates depress bond prices and may be especially tough for credit - sensitive bonds, because higher rates increase the cost of capital.

IRVING: I don't think investors should shun bonds just because we're in a rising rate environment.

And during each of those prior yield curve inversions my answer has been the same: Because in two years your high - yielding bond will mature and you'll be renewing at much lower rates.