Sentences with phrase «bond substitute»
The phrase "bond substitute" refers to an investment or asset that is used as an alternative to purchasing bonds. It means selecting different investment options, such as stocks or other financial instruments, instead of buying bonds to achieve similar goals. Full definition
Bond substitutes with higher yields may look enticing, but they come with their own risks.
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And while dividend stocks can play a role in the stock portion of your portfolio, they're considerably more volatile than bonds, and thus not an appropriate bond substitute.
Investors are about to learn something important and possibly painful: Bonds and bond substitutes do not come with guarantees.
For some time we have believed that businesses with a narrower range of outcomes, or stable businesses, have been bid - up as bond substitutes, while businesses with a more cyclical profile have fallen to more attractive valuation levels.
We would not be the first to point out that there has been a rush toward safer, defensive stocks that are less - cyclical stocks and a rush toward bond substitute stocks like REITs, MLPs, etc., as investors search for yield in a declining interest rate environment.
But today, their high dividend payouts make these stocks attractive bond substitutes, and as such, they sell at much higher P / Es than they have historically.
We know these human bond substitutes as addictions... to substances like alcohol or drugs, social media, gambling, shopping, and any number of other compulsions.
Viewed against a fixed income lens, it is an outstanding bond substitute if you are prepared to hold for a long time.
That was a headwind in 2015, as investors continued to pile into these safe and bond substitute stocks, but we are delighted to report that this has changed in 2016.
Now fixed immediate annuities are another thing, and I recommend them highly as a bond substitute for those in retirement, particularly for seniors who are healthy.
Many observers opined that this week's decline in the bond substitutes was only the start.
For better or worse, most of my net worth is equity in our house (lower return but less volatile than stocks — a bond substitute?).
The utility sector, which many investors have been using as a bond substitute, yields only 3.4 %.
Consider switching your 30 % bond allocation to Jeff M's bond substitute (covered calls using dividend paying stocks).
So a mortgage is no bond substitute, quite the opposite: You're shorting a bond.
In a sense, REITs become a bond substitute.
The Enhanced Yield approach serves as a bond substitute, reducing portfolio volatility while delivering 9 % or so after commissions.