Sentences with phrase «in a rising interest rate environment because»

Bond values fall in a rising interest rate environment because investors sell bonds in favor of higher interest yielding bonds.

Stocks in the consumer discretionary sector also tend to perform well in rising interest rate environments because of the strong economy that caused the increase.

Not exact matches

That's because banks have historically tended to do well in rising rate environments, as they can benefit from making loans at higher interest rates.

I didn't invest a lot in some of my favorite REITs like OHI and O because I felt a rising interest rate environment would be a stronger headwind for REITs.

Because your rate is not locked in for the duration of the loan, a rising interest rate environment will force the lender to increase your mortgage rate, thus adding to your monthly payment.

They don't want to give the impression of a very rapid rise of interest rates because they don't think that a rapid rise in interest rates is justified given the current global environment.

That's because banks have historically tended to do well in rising rate environments, as they can benefit from making loans at higher interest rates.

In a rising rate environment, interest rate risk comes to the forefront, and this is particularly true for fixed income products because of their sensitivity to interest rates, as measured by the concept of duration.

Different, perhaps, because this is first time in 30 - some years where investors are facing a rising interest rate environment.

Those scenarios are also unusual because they highlight how bond investors investing to a fixed term earn more reinvesting coupon payments in a rising interest rate environment.

For example, in a rising rate environment, loan customers may not be able to meet interest payments because of the increase in the size of the payment or a reduction in earnings.

Because the funds invest in short - term interest bearing securities on a constant basis, during rising interest rate environments they are able to achieve higher interest rates much more quickly than more conservative savings instruments, like savings accounts or certificates of deposit.

According to The Four Pillars of Investing, investors should keep their bond terms short because long - term bonds offer little extra return for taking on a higher interest - rate risk and long - term bonds have a larger decrease in price in a rising interest rate environment.

«There is definitely a need to be more cautious and evaluate value more closely, because the bottom line is that value becomes more important in a rising interest rate environment,» he says.