Sentences with phrase «investors holding bonds»

With interest rates being so low, investors holding bonds in a diversified portfolio know that the next forty years can not look as bright as the last forty years.

In other words, it is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity and if all payments are made as scheduled.

Yields can be measured in a number of ways, including coupon yield, or the stated interest rate of the bond, and yield to maturity, which is the total rate of return when an investor holds the bond to maturity.

Suppose, again under the same circumstances, that the investor holds the bond to maturity.

Investors holding bond investments in taxable accounts often turn to municipal bonds because of their tax advantage.

However, if an investor holds a bond until maturity, he or she will be repaid 100 % of invested principal, provided the bond issuer remains solvent.

In other words, it is the internal rate of return of an investment in a bond if the investor holds the bond until maturity and if all payments are made as scheduled.

Yields can be measured in a number of ways, including coupon yield, or the stated interest rate of the bond, and yield to maturity, which is the total rate of return when an investor holds the bond to maturity.

Does that make all investors holding a bond allocation, and not planning withdrawals for over 5 years, irrational?

As an investor holding a bond, the corporation / government becomes liable to pay you a sum of money (as per the profits made) at regular intervals.

Not exact matches

The head of BMO Investments thinks the 60/40 asset allocation ratio (holding 60 % stocks, 40 % bonds for younger investors; the reverse for retirees) is outdated.

Institutional investors (such as pension funds) routinely insist on holding only highly - rated securities, so a downgrade can force them to sell that issuer's bonds.

During the 19 th century, government bonds were often held by London - based investors.

An ad hoc group of investors holding much of the utility «s $ 9 billion in bonds had no immediate comment.

The move rattled investors because the sanctions require that U.S. citizens must divest of any stocks, bonds or other holdings in the targeted firms by May 7.

More broadly, the regulatory agencies in the United States and the Financial Stability Board internationally have work under way focusing on possible fire - sale risk associated with the growing share of less liquid bonds held in asset management portfolios on behalf of investors who may be counting on same - day redemption when valuations fall.

Investors holding Detroit's bonds have already taken a hit as the steady erosion of the city's finances has slashed the city's credit rating to junk status.

Yardeni, a market historian, coined the term «bond vigilantes» in the 1980s to refer to investors who sell their holdings in an effort to enforce fiscal discipline.

The yield on a Treasury bill represents the return an investor will receive by holding the bond to maturity, and should be monitored closely as an indicator of the government debt situation.

the percentage of return an investor receives based on the amount invested or on the current market value of holdings; it is expressed as an annual percentage rate; yield stated is the yield to worst — the yield if the worst possible bond repayment takes place, reflecting the lower of the yield to maturity or the yield to call based on the previous close

Some of the best and most experienced investors in the world have a habit of routinely keeping 20 % of their net assets in cash and cash equivalents, often the only truly safe place for parking these funds being a United States Treasury bond of short - duration held directly with the U.S. Treasury.

The key to unravelling this paradox is to look at how long an investor intends to hold their bond investment.

For example, if you hold a bond paying 5 % interest and market rates rise to 6 %, investors would need to pay less for your bond to be compensated for the lower than market rate.

Unlike mutual funds, individual bonds mature at par letting the investor know exactly what they will earn if the bond is held to maturity.

Exchange - traded funds holding bonds offer cheap, efficient access to bond markets that, for individual investors, can be illiquid and expensive to trade.

The past decade has been a relatively good time for companies to hold debt as funding costs were low and bond investors were willing to snap up virtually any new offering.

So why would an investor choose to hold bonds if this type of market is a possibility from current yields?

If a fund investor is resident in the state of issuance of the bonds held by the fund, interest dividends may also be exempt from state and local income taxes.

That will be important to private investors, because if the central bank held itself out as a privileged bondholder, effectively passing more risk on to other bond holders, other buyers might undermine the stimulus program by demanding higher interest rates.

Regarding Sulyma's holdings in the TDF, for example, the 2012 Summary Plan Description advised Sulyma that «[e] ach fund offers a broadly diversified mix of domestic and international stocks and bonds, and includes investments not typically available to individual investors, such as hedge funds and commodities.»

If the company's underlying stock decreases in value, an investor can still hold onto the convertible bond and receive the bond's par value at maturity, as long as the issuer does not default.

The chase for yield has also caused many investors to increase the duration in their bond holdings to earn more income.

In another crucial provision of the European Central Bank's program, the bank would have equal status to other bond holders — rather than holding itself above other investors and expecting to be paid back first in the event of problems.

In fact, I would bet good money that junk bond investors will wake up one day and find that the value of their holdings will be down 40 - 50 % overnight.

Mom and pop retail investors are exposed to billions of dollars of potential losses through their holdings of Puerto Rican municipal bonds, either directly or in mutual funds.

Owning individual bonds provides the investor full transparency as opposed to fixed income mutual funds, which may even hold stocks.

Interest income generated by municipal bonds is generally expected to be exempt from federal income taxes and, if the bonds are held by an investor resident in the state of issuance, state and local income taxes.

With the larger decline in markets, investors are pulling money out of mutual funds that hold the bonds, depressing their prices and putting pressure on the wider bond market.

A downgrade in the credit rating of a bond by the credit agencies can affect bond performance as well if institutional investors are forced to sell because of restrictions on the credit quality of the bonds they're able to hold.

As well as raising their equity holdings, investors trimmed their bond holdings to 37.6 percent in April, the lowest since January.

In order to get to his recommended target allocation the investor needs to increase stock holdings by roughly $ 200,000 and bond holdings by roughly $ 100,000.

This makes bonds a relatively heterogeneous asset class in which many securities are thinly traded.3 At the same time, institutional investors often hold assets to maturity and, when they do trade, do so in large amounts.

«the probability that the investor holding stocks will double her capital every 10 years after inflation, quadruple every 20, combined with 100 % odd that she will outperform T - bills or government bonds in 20 years, can hardly be called risky.

Dave Nadig, CEO of ETF.com and a well - known ETF expert, recently suggested as much, noting that «Duration hedging hasn't yet had its «hedge the yen» moment when investors discovered the power of currency hedging en masse, but like currency - hedged ETFs, duration - hedged ETFs may start finding a place not necessarily as core holdings, but as finely honed tools for tweaking duration exposure in a broader bond - portfolio context.»

McDonald's issues $ 50 million in bonds with a maturity of 30 years The bonds have a face value (cost) of $ 1,000 and an interest rate of 3.5 % McDonald's pays investors 1.75 % in interest, twice a year for 30 years At the end of 30 years, McDonald's pays the $ 50 million back to investors at $ 1,000 for each bond they hold

The market expects more investors to access the Indonesian market if the speculation of rating upgrade becomes materialized, particularly for those who have not been holding Indonesia bonds for rating reasons.

Yet, bond investors have only piled on more risk, from record growth in high - risk, covenant - lite loans to leveraged - loan funds holding billions in collateral in over-indebted retailers to sustained lows in junk bond yields.

Assets likely to be held by private investors include: cash in bank deposits, securities (such as shares issued by private companies, and government or corporate bonds), property, insurance policies, foreign currencies, cars, art and antiques.

She's promised to increase the federal minimum wage and will call on Congress to mandate that investors hold on to stocks and bonds for a minimum time period, to curb Wall Street's so - called «churn and burn» reputation, and to reduce «investment speculators.»

The beauty of being a long - term investor though is that you will still make the same return on the investment if you hold it until the bond matures.