Sentences with phrase «given bond default»
Although funds can decrease the impact of any given bond default on your portfolio, they can also increase the potential for price declines, particularly when interest rates start to rise as they eventually will.
http://www.mindfullyinvesting.com/ Not exact matches
For savers, particularly retiring baby boomers, ultra-low yields are little short of disastrous, especially given that a 100 % allocation to bonds or annuities is the default option for retirees.
For example, the yields on CCC - rated high yield bonds are quite low on a 10 - year basis given the historically higher default rates in this low - quality portion of the market.
In other words, say the average yield of the bonds HYG holds is 8 %, but 25 % default (effectively giving a yield of 0 %), for an overall yield of 6 %.
Corporate bonds are short an option to default, where the equity owners give the company to the bondholders.
In bond investing, face value, or par value, is the amount paid to a bondholder at the maturity date, given the issuer does not default.
Holding cash or bonds with their extremely low yields is unattractive to me, given that interest rates are at record lows, and not sufficient to compensate for possible default.
Never in my life would I have considered buying a CCC junk bond at 110 to yield 7 % (quick ratings guide: BBB = investment grade, BB = fine company, B = either a fine or a sketchy company the ratings agencies have no clue which, CCC = this will default just give it a few years, D = this defaulted like we said when we rated it BB uhhhh we're not good at this).
Given that those bonds yield a 1.5 percentage point premium over government bonds (which have a default risk close to zero), a corporate bond investor is likely to be left with a one percentage point advantage over government bonds after accounting for the risk of loss.
In a case of first impression in Connecticut, obtained summary judgment in federal district court on behalf of a surety for failure of a performance bond obligee to properly declare the principal in default and to give the surety proper opportunity to exercise its options and limit its liability.