Sentences with phrase «because higher yielding bonds»

The only problem here is if interest rates have risen since your initial investment, your bond won't be worth as much because higher yielding bonds will be available elsewhere.

Not exact matches

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.

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.

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

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

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.

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

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

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.

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.

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

, but I think it's a mistake for risk averse or diversified investors to completely give up on high quality bonds because they're worried about poor returns from low yields.

Borrowers issue high - yield or «junk» bonds because they are considered too risky to raise funds through established channels.

Those who are purchasing bonds like dropping bond prices because it means that they can get higher yields.

Edelman says that many investors have piled into long - term bonds and high yield debt because they come with higher yields.

Putting aside the performance of bonds during the bear market beginning in 1980 (both because the starting yields on Treasuries were so high but also because the bear market was relatively mild as the decline began from relatively low levels of valuation), what's interesting about the above chart is how dependably bonds protected a portfolio during equity bear markets.

Money market accounts offer higher yields because they are linked to low - risk bonds and other relatively liquid instruments.

This is because investors are worried about rising interest rates, something that makes investment in utilities less attractive compared to bonds and other high yield stocks.

It doesn't help that 10 - year bond yields are still lower than the prospective operating earnings yield on the S&P 500 (the «Fed Model»), not only because the model is built on an omitted variables bias (see the August 22 2005 comment), but also because the model statistically underperforms a simpler rule that says «get in when stock yields are high and interest rates are falling, and get out when the reverse is true.»

Loko - Invest's Kirill Tremasov said the biggest danger of the new sanctions might be in scaring foreign investors off Russian OFZ treasury bonds, popular in the West because of their high yields.

NOTE: High - yield bonds are subject to additional risks, such as increased risk of default and greater volatility, because of the lower credit quality of the issues.

But premium bonds could actually offer a good deal because they may come with higher coupon rates and greater yield in the long run.

And just as long - term bond prices decline as interest rates rise (because new investors demand the yield on old bonds matches those of newly issued, higher yielding ones), the same can be true (though not always) for triple net lease REITs such as STORE Capital.

Analysts at Moody's Investors Service Middle East in Dubai say the issuance is credit positive for Saudi banks because their profitability will benefit from the transfer of their large, low - yielding reserves of cash and placements from the Saudi Arabian Monetary Authority and other banks to higher - yielding government Islamic bonds.

After all, the long - term bond holders should demand a higher yield because, with time, risk and uncertainty increases.

That's in large part because dividend yields have been considerably higher than government bonds in most developed markets including Canada over this time.

High yield bonds are interesting because they have some properties of Treasury bonds, and some properties of equities.

The yield to maturity is higher than the 3 % coupon because when the bond expires, I get paid back $ 100 a share.

Bond values fall in a rising interest rate environment because investors sell bonds in favor of higher interest yielding bonds.

High yield bonds are interesting because they have some properties of Treasury bonds, and some properties of equities.

That's in large part because dividend yields have been considerably higher than government bonds in most developed markets including Canada over this time.

High - Yield bonds are a smaller portion of the typical fixed - income investment portfolio, because they have much more default risk.

High yield bonds are better known as junk bonds because the credit quality of the underlying bond issuer is low.

Because bonds with longer maturities have a greater level of risk due to changes in interest rates, they generally offer higher yields so they're more attractive to potential buyers.

Because these bonds aren't quite as safe as government bonds, their yields are generally higher.

Those who are purchasing bonds like dropping bond prices because it means that they can get higher yields.

The advice on avoiding high - yield debt needs more explanation, because bonds with high payouts are not especially sensitive to interest rate movements.

Because they are more equity - like, high yield bonds have intrinsic risk that is independent of the level of yields in high quality bonds, the leading example of which are Treasury bonds.

Color me neutral now, because the supply of cash to invest in high yield bonds, stock IPOs, and private equity is substantial.

Even if a bond fund manager has discretion with their maturities, I might opt for GICs over a lot of bond funds these days because reasonably conservative, high - quality bonds might only be paying 3 % yields right now.

That's because it would cause bonds — and maybe even high - yield stocks — to fall in value.

This environment also could favor floating - rate funds and high yields because the additional yield may help offset a decrease in bond prices.

High - yield bonds generally have a higher credit risk, because of their lower credit rating than traditional bonds.

Because municipal bonds seek to provide tax - free income, they have generally offered higher yields than their taxable counterparts.

If you sell out of high - yield bonds now because you're worried about defaults, you could miss out on potential gains if the economic growth improves or if rates stay the same.

But their interest - rate sensitivity can be lower because they typically offer higher yields than many other types of bonds.

Because high - yield bonds generally have a substantial correlation to equities, it could be expected that the portfolio's beta would be approximately between 1 --(0.15 + 0.10 + 0.05) = 0.7 and 1 --(0.15 + 0.10) = 0.75, which it was at 0.73.

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

These iShares ETFs are extremely popular, at least in part because they pay unusually high yields: despite holding nothing but short - term government bonds, CLF pays almost 4 %.