Sentences with phrase «equity yields during»

The apparent one - to - one relationship between Treasury yields and equity yields during that span (which is the entire basis for the «Fed Model») is anything but a «fair value» relationship between stocks and bonds.

Not exact matches

In essence, investors who reinvest their dividends accumulate more shares during stock market collapses as the dividend yield expanding allows them to gobble up more equity with each dividend check they shove back into their account or dividend reinvestment plan.

During times of recession the economy is stimulated with low interest rates and once they get low enough, the yield on bonds and other fixed investments becomes so unattractive that money starts to flow into equities.

During the late morning and into the afternoon, equities continued to climb (S&P +30 to 2676), while the 10 - year yield remained below 3 %.

Putting aside the performance of bonds during the bear market beginning in 1980 (both because the starting yields on Treasuries were so high but also because the bear market was relatively mild as the decline began from relatively low levels of valuation), what's interesting about the above chart is how dependably bonds protected a portfolio during equity bear markets.

I've also marked on the graph the level that yields would need to fall to in order to match the total return earned during prior equity bear - market periods.

The best framework for bonds protecting portfolio capital during equity bear markets is: average to above - average starting bond yields, with an average to above - average rate of inflation — which is set to decline in a recession - induced bear market.

However, for bonds to provide a similar level of return as they did during the last equity bear market described above, yields would have to fall to approximately minus 2 %.

To the extent credit markets take the events in Washington in stride — even during the worst selling last week high yield spreads remained comfortably below 400 basis points (4 %)-- equity investors can breathe a little easier, at least until they can't.

Considering the low yield bond investors are earning during sunnier days for equity - only investors, when the storm comes, that outcome would be particularly painful.

Putting aside the performance of bonds during the bear market beginning in 1980 (both because the starting yields on Treasuries were so high but also because the bear market was relatively mild as the decline began from relatively low levels of valuation), what's interesting about the above chart is how dependably bonds protected a portfolio during equity bear markets.

The best framework for bonds protecting portfolio capital during equity bear markets is: average to above - average starting bond yields, with an average to above - average rate of inflation — which is set to decline in a recession - induced bear market.

I've also marked on the graph the level that yields would need to fall to in order to match the total return earned during prior equity bear - market periods.

It does indeed seem that retiring at times with particularly low bond yields, which can be expected to increase over time, may not favor rising equity glidepaths during retirement.