Sentences with phrase «because bond yields»

Maybe you could also shed some light on this quote by Colm O'Shea «A lot of people say there is apparently no inflationary threat from the growing U.S. debt because bond yields are low».

That favorable bond market can't be repeated in the next 15 years because bond yields are now so low.

We don't suggest any bond mutual funds for the Honour Roll portfolios this year, mainly because bond yields have dropped to such low levels that investing in a managed bond fund doesn't make sense.

One caveat is that annuity pricing can vary over time, not only because bond yields fluctuate but also because insurance companies are not always hungry for your annuity dollars.

However, even in this situation bond funds almost always provide a positive return (if held for their duration) because bond yields and inflation rise together.

However, even in this situation bonds almost always provide a positive return (if held for their duration) because bond yields and inflation rise together.

That rule is harder to follow these days because bond yields are lower, which means the bond portion of a nest egg throws off lower returns.

But it's wrong to assume that just because bond yields are so low today that they have nowhere to go but up.

Stocks are cheap relative to bonds because bond yields reflect little growth and aggressive central banks.

That's because bond yields and stock valuations tend to track each more closely at higher levels of inflation.

Because bond yields are often changing, yield spreads are as well.

However, even in this situation bonds almost always provide a positive return (if held for their duration) because bond yields and inflation rise together.

Finally, the Fed's easy - money policies have pushed investors into the stock market because bond yields are so low.

We use nominal returns because the bond yield is stated in nominal terms and includes an expected market inflation rate.

Not exact matches

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.

So, it is a very different market than it was 10 years ago, and you're going to see a lot of corporate bond issuance as these infrastructure projects go out there, and you can capture some pretty good yields and you know what you're buying because it's a corporate bond.

In other words, because investors can not generate a sufficient return from low - yielding bonds, they turn to stocks as their only alternative.

Because the central bank's purchases represent increased demand, it tends to push up government bond prices, thus lowering yields.

But he warned that could be changing: «There's a very low hurdle for that surprise because bond market yields are so low in the front end of the curve.

Investment manager Third Avenue announced plans to liquidate its high - yield - bond mutual fund, and it said it would ban redemptions because it was unable to exit positions quickly.

That's because low bond yields reduce the odds that you will earn a return that keeps pace with inflation in coming years.

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.

Most investors shy away from bonds because they yield (or return) less than equities and tend to be more complex in nature.

They'll be hoping the benchmark for global borrowing costs rises even further, because their collective bet on higher U.S. bond yields has never been greater.

On a serious note, I was rotating into utilities instead of bonds because of low bond yields.

Treasury yields have been rising not because of rising risks but because the asset bubble in bonds is deflating, inflation is rising, and investors are demanding more yield.

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.

And retail investors, who have poured massive amounts of money into bond mutual funds because cash had a near - zero yield, can now park money in T - bills and earn close to 2 % with no risk of loss.

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

The change came because of the bond yields increasing.

Many bonds trade at negative yields because the European Central Bank (ECB) and the Bank of Japan (BOJ) continue to buy bonds as part of their management of monetary policy.

Advisors should give fixed indexed annuities (FIAs) a serious look because FIAs offer a compelling story in an era of low bond yields, according to Roger G. Ibbotson, one of the most recognizable names in finance.

Because they are considered to have low credit or default risk, they generally offer lower yields relative to other bonds.

Real bond returns have been high over the past 30 years or so because nominal starting yields were high and inflation has fallen.

I slowed my municipal bond purchases because the 10 - year bond yield edged down to about 2.15 %, which made yields unattractive.

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.

Higher yielding fixed income offers those higher yields because the issuers of the bonds have a better chance of defaulting on their debt.

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.

The REIT that was was attractive with a 5 % dividend yield when the 10 - year bond yield was at 2 % is no longer attractive when the 10 - year bond yield is also at 5 % because the 10 - year bond is risk - free.

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.

Just because there is a rule stipulating that QE program purchases of sovereign bonds be in relation to GDP, the ECB has and will continue to do «whatever it takes» in order to prevent peripheral Eurozone bond yields from blowing out to near - reality levels.

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.

«When I purchased long - term zero - coupon bonds in the early 1980's at market yields in excess of 13 %, I welcomed the prospect of outsized volatility because I felt it would eventually work in my favour.»

You're right that the margin of safety is so much smaller in bonds because the yield won't be there to pick up the slack.

An increase in rates will still decrease the price of high - yield bonds but not as much as with other bonds because high - yield bonds follow the economy more closely.

Because the level is so critical and the base is so big, a break in the long - bond yield above 3.22 % likely would lead to a big move up in yields.

Their cost of capital is a function partly of low interest rates and part of the implicit share price is a function of the fact that investors have looked at equities for dividends rather than bonds for yield because the bond market is so expensive.

Another reason to hold shares in the high - yield fund is because of the way the bonds react to the economy and interest rates.