We'll
discuss bond ratings, tax savings, and risks to investing in the bond market.
In this article published in The Australian, Roger
discusses bond rates, interest rates and debt in Australia.
Not exact matches
The «Futures Now» team
discusses the rise in
bonds as the Fed looks more likely to raise
rates in two weeks.
The «Futures Now» team
discusses moves in the
bond market and where interest
rates may be heading with Jackie DeAngelis.
Jon Smith, of DT Investment Partners,
discusses the effect of an interest
rate hike on
bond markets... see why we prefer individual
bond holdings over engineered ETFs in this environment.
David Kotok, chairman at Cumberland Advisors,
discusses the Fed's policy path next year, the impact of the
rate hikes on the
bond market and his outlook for 2016.
Scott Mather, CIO U.S. core strategies, Joachim Fels, global economic advisor, and Olivia Albrecht, fixed income strategist,
discuss PIMCO's view on the stock /
bond relationship, value in U.S. assets, the Fed's inflation target and rising
rates in 2018.
I also
discussed in Article 8.3 that Treasury Inflation Protected Securities (TIPS)
bonds are likely to provide a particularly good hedge against the true risk of unexpected inflation
rate increases.
Before we get to that, there's something that many investors forget when
discussing the implications from rising
rates on
bond returns.
From a global policy perspective, we think the Fed's recent hikes are the first stage in a cycle that will later this year see the European Central Bank (ECB)
discuss a more normalized
rate policy, and then lastly Japan's BoJ may at least expand its 10 - year Japanese government
bond (JGB) yield target range.
We don't
discuss bonds often in this blog, mostly because interest
rates are currently at artificial lows.
Pressure,
rate, rhythm, the length of the massage, respect,
bonding, why baby cries, baby's body language, positioning of the baby, relaxation and parent empowerment are some of the skills and topics that will be
discussed.
While this might not seem like a crazy boost from the 2.96 % yield of the fixed income ETF that I just
discussed, it's larger than it seems because dividends are taxed at a favorable
rate compared to the interest income generated by
bonds.
ProShares Head of Investment Strategy Simeon Hyman
discusses how ProShares Interest
Rate Hedged Bond ETFs target a duration of zero to eliminate interest rate r
Rate Hedged
Bond ETFs target a duration of zero to eliminate interest
rate r
rate risk.
The changing interest
rates we
discussed above affect a
bond's value.
Again, this is something I rarely see
discussed when comparing different investments —
bonds and other interest income is regular taxable income (taxed at your normal marginal tax
rate) rather than at the much more advantageous long - term capital gains or dividend
rate.
Julie Cooling, CEO of RIA Channel, speaks with ProShares» Simeon Hyman during the 2017 Inside ETFs conference to
discuss two of 2016's top - performing ETFs, REGL and SMDV, Simeon's optimistic outlook for mid - and small - cap equities, and interest
rate hedged
bond solutions for a rising
rate environment.
As we've
discussed before, the duration of a
bond fund is an important indicator of its risk level because the longer the duration, the more the fund's price will fluctuate as a result of changes in market interest
rates.
Since this site is not really about
bonds, there is a separate page
discussing how
bond prices change as they ride down the yield curve, and what losses would be expected from a change in market
rates, and how to use the spreadsheet (Excel and OpenOffice).
In this article for Cuffelinks, Roger
discusses quantitative easing and why long
bond rates can not stay low forever.
A sizable body of literature
discusses the risks associated with carry strategies and the failure of spot prices to converge, such as the failure of uncovered interest
rate parity in currency markets beginning with Fama (1984) and Hodrick (1987); the failure of the expectations hypothesis in
bond markets (Fama and Bliss, 1987); and the persistence of contango and backwardation in commodity markets, as far back as Keynes (1930).
I also
discussed in Article 8.3 that Treasury Inflation Protected Securities (TIPS)
bonds are likely to provide a particularly good hedge against the true risk of unexpected inflation
rate increases.
He
discussed the likelihood of interest
rates rising and suggested that investors who want to hold
bonds reduce their duration or take it to zero.
Changes in short - term versus long - term interest
rates can affect various
bonds in different ways, which we'll
discuss below.
As I have
discussed in recent blogs, TIPS
bond ladders are relatively free of interest
rate risk if we hold individual
bonds to maturity.
This can be accomplished by investing some portion of your
bond holdings in government TIPS
bonds as
discussed in Article 6.2, because TIPS returns are adjusted for changes in inflation and perform particularly well in situations where interest
rates rise unexpectedly.
With inflation ticking higher and the employment situation improving, the Federal Reserve anticipates gradually lifting the benchmark federal funds
rate in 2017 and 2018.1 Officials are also
discussing plans to shrink the Fed's huge
bond portfolio ($ 4.5 trillion).
As
discussed in Article 6.2, the future returns for
bonds are expected to be very low because of today's historically unprecedented low interest
rates.
Prices of
bonds can also fluctuate similar to stocks, but
bond prices are more predictably correlated with changes in interest
rates, as
discussed in Article 6.2.
This article
discusses the relationships between tax - exempt municipal
bonds,
bond market returns, marginal tax
rates, and investment asset tax location.»
As
discussed above, the key to a
bond investment that helps to diversify equity investments is interest
rate risk.
They further
discuss bonds, interest
rates, the US dollar and gold.
In my post, Statement Shock:
Bonds in the Red, I
discussed why
bond prices drop when interest
rates rise and why this shouldn't matter much to investors with a sufficient time horizon.
To
discuss the fundamentals of «spread trading», one must recall the relationship of
bond prices to interest
rate movements.