Many
bond investors worry about rising interest rates, but perhaps not everyone should.
Many
bond investors worry about rising interest rates, but perhaps not everyone should.
Not exact matches
[A] s rates reached their lowest level ever in 2016,
investors rather
worried about the «biggest
bond market bubble in history» coming to a violent end.
What should
worry you is the absence of long - term fundamental
investors who will buy
bonds — intermediated by dealers, sure — when everyone else is selling.
Since
bond prices fall as interest rates rise, this possibility has many
investors worried about their exposure to interest rate risk.
This makes sense given how
bonds are structured, but I think many
investors miss this point when they
worry about the potential risks from rising interest rates.
In the 1990s, when
investors were more
worried about inflation and the potential for an aggressive Bank of Canada (BoC), the correlation between stocks and
bonds tended to be positive.
Anecdotally I can confirm that
investors are indeed
worried about how
bonds and
bond funds will behave if rates continue to rise.
These advisors are not alone as many
investors are
worried about the future prospects for diversified stock and
bond portfolios from today's levels.
After 30 years of declining interest rates,
bond investors are beginning to
worry that rates will go higher — especially after the events of May 2013.
That could mean
investors are moving money out of stocks and into
bonds in anticipation of disappointing earnings; or that foreigners who are
worried about their own economies are looking for a safer haven in the U.S.; or that expectations of future inflation have declined, allowing long - term interest rates to come down a little.
«If an
investor is
worried that the market might be heading for a decline, they may want to trim some of their winners in the stock market and invest in short - term Treasury
bonds or other high - quality fixed - income investments.»
If the stock market happens to crash around the time you are ready to retire, a too true fact for many in 2008, the
bond investor doesn't have to
worry because his money is safe.
, 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.
Many
investors haven't had to
worry about this question for years, as the Federal Reserve has continued its zero - rate policy, and the bull market in
bonds has gone on for decades.
Whenever interest rates rise, many
investors especially retirees with large
bond holdings, are
worried.
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.
-- Junk -
bond investors are passing up traditional protections in their race to buy new debt, and some participants
worry the diminished safeguards are a sign of an overheated market.
Meanwhile, Bear Sterns, the second - biggest underwriter of mortgage
bonds, lost more than $ 1.3 billion in market value yesterday as
investors worried about the firm's liquidity.
Secondly, they are lower volatility, which means that
investors can cash in their holdings more regularly without having to
worry about the price actions in the
bond market.
During times of volatility and
bond market uncertainty, it's worth noting that 401 (k)
investors shouldn't
worry too much about what level of income their
bond funds provide.
Conversely, the demand for those government
bonds declines and interest rates go back up to where they were before
investors became
worried.
What income
investors have to
worry about next year is rising
bond prices.
Fundamental
bond investors (like me) have been
worried for a while, but usually it takes a few years of lending at low spreads before something breaks.
I'm concerned that Couch Potato
investors,
worried their
bond holdings are «certain» to fall in the near future will think this product can offer some safety.
And when one country has a financial crisis,
investors worry that its neighbors will follow, and their
bonds can lose value, too.
Not only are savings accounts and GICs yielding peanuts, but
bond investors are
worried that a spike in rates will send the value of their
bond funds and ETFs plummeting.
In the 1990s, when
investors were more
worried about inflation and the potential for an aggressive Bank of Canada (BoC), the correlation between stocks and
bonds tended to be positive.
That way, there's typically no commission involved, you pay the same offering price as everybody else, including institutional
investors, and you don't have to
worry that the dealer has marked up a
bond's price excessively.
As long as
bonds are held until maturity, the
investor does not have to
worry about the day to day price changes in the
bond.
If I'm an
investor in government
bonds, and I'm
worried that a government is borrowing too much money, I may only invest in a
bond if they offer me a higher interest rate.
This spread has a ways to tighten before equities» relative valuation starts to look less attractive (it's when the stock /
bond PE ratio is closer to 1 that
investors should start to
worry).
It's one of the biggest
worries I hear from
investors who hold
bonds: what's going to happen to my portfolio when the Federal Reserve raises interest rates?
As stock investing generally requires a very detailed market study and is a very volatile investment in terms of return of investment,
investors, especially the new
investors out there are now turning to investing in
bonds, as
bond investments are safer than most of the other forms of investments and you need not constantly
worry about prices going high or low.
Unlike the 1970s and early 1980s,
investors don't have to constantly
worry about inflation eating into their wealth or pushing
bonds yields up and
bond prices down.
Rising interest rates can hurt
investors who own
bonds or
bond mutual funds, and many fixed income
investors are
worried that rates are so low right now -LSB-...]
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