Sentences with phrase «because yields on bonds»

My retirement accounts are more like a 50 - 50 split between stocks and bonds, because of a longer time horizon and because yields on bonds are extremely unattractive right now.

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.

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.

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

, 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.

Because of «Abenomics»» artificial demand for JPY Bonds has pushed down JPY Bond Yields, Aflac got only a 2.16 % return on its Japanese float — exactly half the return Aflac received on its USD float.

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.

Because the changes in tax law may not affect all investor classes equally and may be different depending on the state in which the investor is located, the effect of these changes on demand for tax - exempt bonds and required investor yields is still being determined.

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.»

Capital markets are very sensitive to inflation because of its impact on real long - term returns, so it is not surprising that bond yields have fallen as inflation has come down.

He lost money because a lot of other funds have made money gambling on corporate junk bonds that are yielding about 6.5 % now.

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.

Back in 1980, an investor would have still seen a return greater than 8 % over the following 12 months because the average yield on a core bond fund was more than 13 %.

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

At present, the relationship between earnings and bond yields seems tighter because of the large substitution of debt for equity going on, but that's not a normal thing in the long run.

I once was a mortgage bond manager, and I bought senior securities because the yield spreads on the lower - rated securities were so small.

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.

This makes the yield to maturity easier to calculate for zero coupon bonds, because there are no coupon payments to reinvest, making it equivalent to the normal rate of return on the bond.

These types of low - rated bonds are the same as the high - yielding and speculative bonds, because they carry the highest risk and can bring the highest return on investment, if they are paid back at maturity.

However, the yield isn't, because the yield percentage depends not only on a bond's coupon rate but also on changes in its price.

Over the (very) long run, equities out - perform bonds and cash, as is evident below, but may not be practical alternative to bonds for many investors, because of investment horizon, risk - tolerance, dependence on yield, or all the above.

Mortgage rates generally rise and fall along with yields on Treasury notes and bonds because those government securities reflect the overall direction of interest rates.

In fact, if inflation rises to the same level as the interest rate on my bond (3 %), then I am not receiving any real return on my investment because prices are going up at the same rate as my yield.

Known as «high yield» because of the rewards offered to those who are willing to take on the additional risks of a lower - quality bond.

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.

Because of the inflation adjustment, this Fund's 30 - day yield may be more volatile, and differ substantially from one month to the next, than 30 - day SEC yields quoted on traditional (nominal) bond investments.

Because the coupon rate on the bond is already fixed, the price of the bond will have to drop proportionately so that the return from the bond (i.e. the yield) increases to 6 %.

And this is made clear when bond yields began climbing after the U.S. Senate's tax plan was revealed but the yen held its ground and only grudgingly weakened on some pairs, very likely because disappointment over the U.S. Senate's version of the tax plan

I ask because before reading all the great links you have provided i always thought of bonds as safe but rather boring as i believed one was always limited to the profit on the yields.

A Review of the Evidence, in which Fernando Duarte and Carlo Rosa argue that stocks are cheap because the «Fed model» — the equity risk premium measured as the difference between the forward operating earnings yield on the S&P 500 and the 10 - year Treasury bond yield — is at a historic high.

This is very rare, but when it happens, it leaves a lot of very unhappy investors; their coupon payments are taxed as ordinary income and, if they choose to sell the bond, the price they receive will be reduced because buyers would require a higher yield on a taxable bond.

These days, you don't hear savings bonds discussed that often, partly because 529s and Coverdells seem like better alternatives and partly because yields on savings bond are now so modest.

The taxable bonds should have a higher yield than tax - free munis and, because you're buying them in a retirement account, you don't have to worry about paying tax each year on the interest generated.

I raise this ticklish issue (investors are passionate about their dividends) because the yield on a stock, unlike a bond, doesn't indicate how much the company is worth.

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.

The present environment is characterized by unusually overvalued, overbought, overbullish conditions, with rising 10 - year Treasury bond yields, heavy insider selling, valuations on «forward earnings» appearing reasonable only because profit margins are more than 70 % above historical norms (fully explained by the negative sum of government and personal savings as a share of GDP), with the S&P 500 at a 4 - year market high, in a mature market advance, with lagging employment indicators still positive but more than half of all OECD countries already in GDP contraction, Europe in recession, Britain on the cusp, and the EU imposing massive losses on depositors in order to protect lenders in an unstable banking system where Cyprus is the iceberg's tip.

And here's the rub: high yield bonds do not react to yields on Treasuries, except negatively, because when Treasuries rally hard, times are not good, and high yield bonds do poorly, with yields rising.

It looked dumb on current performance, but if you look at investing as a business asking what level of surplus cash flows the underlying investments will throw off, it was an easy choice, because bonds were offering a much higher future yield than stocks.

In addition, focus on those funds that hold most of their assets in stocks because screening the stock - fund universe for high dividend yields alone will turn up some funds that have substantial stakes in bonds and other assets such as convertibles.

In a follow - up comment, Shoehorn argued that: «When bonds have an effective PE of 100 (as they do in much of Europe), and inflation is only 1 %, you'd happily hold stocks on CAPE ratios of 50 (earnings yield 2 %), because that's the only way to make a positive return in that market.

Yields on municipal bonds are often lower than corporate or Treasury bonds with comparable maturities, because they have important tax - free advantages.

That was a wise choice, because trying to improve on this simple model is, in my opinion, the biggest knock against many of the competitors to these new ETFs, including the iShares CorePortfolios (CBD and CBN), which hold REITs, high - yield bonds, preferred shares, and track fundamental indexes.

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».

Yields on callable bonds tend to be higher than yields on noncallable, «bullet maturity» bonds because the investor must be rewarded for taking the risk the issuer will call the bond if interest rates decline, forcing the investor to reinvest the proceeds at lower yYields on callable bonds tend to be higher than yields on noncallable, «bullet maturity» bonds because the investor must be rewarded for taking the risk the issuer will call the bond if interest rates decline, forcing the investor to reinvest the proceeds at lower yyields on noncallable, «bullet maturity» bonds because the investor must be rewarded for taking the risk the issuer will call the bond if interest rates decline, forcing the investor to reinvest the proceeds at lower yieldsyields.

• When the bond fund's yields start to go back up to par with market rates (because new higher - yielding bonds are always being purchased), then this attracts money that was sitting on the sidelines waiting before, because they were afraid of interest rates going up.

Our research on the Fundamental Index ® concept, as applied to bonds, underscores the widely held view in the bond community that we should not choose to own more of any security just because there's more of it available to us.10 Figure 9 plots four different Fundamental Index portfolios (weighted on sales, profits, assets and dividends) in investment - grade bonds (green), high - yield bonds (blue) and emerging markets sovereign debt (yellow).11 Most of these have lower volatility and higher return than the cap - weighted benchmark (marked with a red dot).

Bond yields recovered a bit on Wednesday but resumed slumping on Thursday, thanks to continuing concerns over Hurricane Irma and because of the ECB's comment about an implied future tightening move,

Goldman Sachs & Co., the lead underwriter on the deal, is proposing preliminary yields of 2.63 percent to 2.75 percent on bonds maturing in 2056, according to three people familiar with the price talk who asked for anonymity because the deal wasn't final.