Sentences with phrase «bond duration»

As a general rule - of - thumb, for every percent increase in interest rates, there will be a 1 % decrease in the bond price for each year of bond duration.

Note also that the average bond duration for these fixed income funds will influence their rates of portfolio turnover.

Note also that the average bond duration for these bond funds will influence their rates of portfolio turnover.

Alternatively, you can do an Internet search for «bond duration calculator» and you'll find lots of choices.

As a day trader, one needs to ideally remain aware of what part of the business cycle one is in, as this has important implications for how to trade bond duration.

Bond duration measurements help quantify and measure exposure to interest rate risks.

I'll bet many investors thought that interest rates only move in one direction, now they are beginning to realize that at low rates bond duration increases and when rates rise you actually lose money in your fund.

In contrast, bond durations as of the end of 2008 were higher than at any time since the early 1950's, so that an investor in 10 - 30 year Treasury bonds is presently assured of a low yield - to - maturity if the bond is held for the long - term, while being at the mercy of market direction even to achieve that low rate of return.

Karen had read my post on bond duration, where I explained that investors should try to match the duration of their bond fund to their time horizon.

The actual way that yield curves tend to move tend to overstate long bond durations [interest rate sensitivity] by two years versus a parallel yield curve shift.

In last week's market comment, I emphasized the shift in durations that we've observed in recent quarters, with stock durations plunging and bond durations getting much longer.

But you still get a good sense of the risk differential between bond duration and maturities when looking at this losses: *

While this only goes back to 1999, it would still be insightful to compare these two indexes on a year by year and aggregate basis for total return and volatility to get a true sense of the difference that treasury bond duration makes.

Effective Duration - This statistic provides a measure of the sensitivity of the Fund's price to changes in interest rate changes and is calculated as the weighted average of the individual bond durations.

You can find several bond durations and long / short / leveraged options in this article on the Treasury Bond Bubble but primarily, I like using (TMF) and (TMV) for long / short 3X Daily 10 Year duration.

In the US Treasuries market, a 25 - year bond duration has about 20x the volatility of a bond with a two - year duration.

Single - bond Duration Calculator and Bond Convexity Calculator: Easily calculate all of the usual duration and convexity numbers, and see how changes in interest rates change the price of a bond in greater detail.

Due to the mixture of bond durations and other factors, this would be an apples and oranges comparison.

The strategy of Strategic Total Return has never relied much on the existence of a bull market in bonds (indeed, our average bond duration has rarely exceeded 4 years since the inception of the Fund, and has often been limited to just 1 - 2 years).

Bond duration, a measure of interest rate risk, is near benchmark levels.

All bond durations 4 years or less and held to maturity.

You can always shorten your bond duration, but too much and then it essentially becomes the same asset class as cash or money market funds anyway.

Bond duration, like maturity, is measured in years.

As a result, the impact of interest rate fluctuations on strip bonds, known as the bond duration, is higher than the impact on periodic coupon - paying bonds.

The conventional wisdom is to keep your bond duration short.

On Tuesday, in response to evidence of accelerating yield pressures, as well the recognition that QE2 was much further along than investors widely seem to believe, we substantially cut our bond duration to about 1.5 years in Strategic Total Return.

The conventional wisdom is to keep your bond duration short if you expect rates to rise.

Without getting too deep in the weeds, we should recognize something about bonds — as interest rates rise bond duration declines (bond duration is the bond's price sensitivity to interest rate changes so, a 1 % rise in rates will result in a 5 % loss for a bond with a duration of 5).

For instance, when rates are 4 % and fall to 2 % an investor in 10 year bonds might only get 20 % principal increases assuming the bond duration is about 10.

I also presented in Article 6.2 that the «sweet spot» for bond durations is around 7 years, because it balances between decent yields and manageable potential price declines.

Bond duration is a measure of how long it will take to reach a bond's mid point in cash - flow terms.

The longer the bond duration and the higher the interest rate, the greater the effect on bond prices.

And if you shortened your bond duration based on CIBC's prediction of rising rates, well, that didn't work out either: the yield on 10 - year Canadas had fallen to 1.81 % by December 30.

When investing in bond mutual funds you need to decide the type of bond fund by bond quality (default risk) and bond duration.

Bond duration, which measures the sensitivity of a bond price to changes in interest rates, demonstrates that prices change less for closer maturity dates.

Such a comparison would be an apples and oranges comparison, due to the mixture of bond durations and other factors.

If you want bonds to maximize the potential benefit, yet do so within a small bond allocation, you need to consider increasing bond duration, and reducing default risk.

Bond duration is the weighted average of the expected cash flows for the bonds in the portfolio.

In addition to default risk and bond duration, lower bond mutual fund fees have been shown to have a significant impact on expected bond yields.

When investing in fixed income funds you need to decide the type of bond fund by bond quality (default risk) and bond duration.