We are in the down cycle most every stock is going to be converted to
bond holder equity over the next 2 years.
Not exact matches
And not just as a counterweight to more volatile
equities — the steady decline in interest rates since the 1980s caused
bond prices to rise, giving their
holders» RRSPs a nice tailwind.
There is no share
holder buyer of last resort, and so
equity buyers can demand a higher return than
bond holders.
Any productivity gains would have to be allocated to
equity owners at the expense of
bond holders and workers who would merely tread water or lose ground as the economy expands.
We are also sceptical that
holders of high - yield
bonds would be motivated to switch into
equities, given the pervasive overweight that already exists in this asset class,» he said.
Originally most
equity investments were made with an eye towards how much income they would pay to the stock
holder; today Dividend paying stocks (or ETFs or Mutual Funds) play that role along with Fixed Income (
Bond / Debt) investments and increasingly more sophisticated investors are looking into Alternative Investments («Alts»
Explore Income Generating Investments: Originally most
equity investments were made with an eye towards how much income they would pay to the stock
holder; today Dividend paying stocks (or ETFs or Mutual Funds) play that role along with Fixed Income (
Bond / Debt) investments and increasingly more sophisticated investors are looking into Alternative Investments («Alts» include private
equity, hedge funds, managed futures, real estate, commodities and derivatives contracts).
While
bonds offer
holders a creditor stake because they are lenders for the company, stockholders have an
equity stake, meaning they are owners.
The optimal outcome is that you get paid principal & interest to the stated maturity from this
bond that is deep in junk territory, CCC + / Caa1 - rated, where the proceeds of the deal don't increase the value of the firm, but are paid as a dividend to the
equity holders.
How better to get a government guarantee and increasing prices of those
bonds then take the
equity holders out.
For the
holders,
bonds hold two main functions; hedging against
equity risk and generating steady income.
Preferred shares are
equity investments in the sense that they stand behind
bond holders in the event of bankruptcy.
The borrowing in foreign exchange may be from an overseas bank / export credit agency / supplier of equipment or foreign collaborator, foreign
equity holder, NRI, OCB, corporate / institution with a good credit rating from internationally recognised credit rating agency, or from international capital market by way of issue of
bonds, floating rate notes or any other debt instrument by whatever name called.
Do you know what Larry MacDonald was comparing when he said that
holders of
equity mutual funds would have been better off investing in
bonds?
The policy
holder of the Horizon ULIP could buy either the SBI Life
Bond or the SBI Life
Equity scheme.
A small portion of the
equity would go to
holders of the retailer's
bonds, the person said.