Sentences with phrase «investors sell bonds»

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

Suppose further that after ten years, the revised issue price of the bond using the constant interest rate method is 70 (the original issue price of 50 plus 20 points of accrued OID) and the investor sells the bond to a second investor at a price of 60.

Finally, suppose the investor sells the bond after five years at a price of 88.

If an investor sells his bond today, the buyer will want an interest rate higher than the original 6 % to compensate for the extra risk.

Not exact matches

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.

In the past, banks would happily buy corporate bonds that investors wanted to dump and then either sell them to someone else or package them up in another type of security.

But the fact that investors are selling CLOs suggests problems in the bond market are deeper than some might suspect, and are raising parallels to the financial crisis.

Japanese government bonds skidded in their worst sell - off in more than three years, despite weaker stocks, accelerating a slide begun in the wake of last Friday's Bank of Japan easing steps that disappointed many investors.

By selling the bonds to Monaco, investors were trying to get around the 11th Amendment to the U.S. Constitution, which says, «The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state.»

Icelandic banks played the carry trade too, and foreign banks followed suit by creating «glacier bonds,» which were repackaged Icelandic bonds sold to investors outside the country.

The idea that small companies should be able to sell small amounts of stocks and bonds to investors — which they've been prohibited from doing since the Depression — has exploded over the past few years.

Sovereign bonds will still prove popular for investors over the next two years and a sharp sell - off in fixed income will fail to materialize, an economist at UBS told CNBC Thursday.

Back in 2010 it paid $ 550 million to settle charges brought by the Securities and Exchange Commission that it mislead investors into buying a so - called synthetic collateralized debt obligation named Abacus, which was made up of a bundle of financial instruments tied to subprime mortgage bonds, many of which plummeted in value shortly after the deal was sold.

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 online lender, founded by Renaud Laplanche in 2006, has decided to package its loans and sell them to investors as bonds, The Wall Street Journal reports.

Selling prior to maturity can present a challenge for municipal bond investors due to the fragmented and thinly traded nature of the market.

In addition, some investors successfully build the value of their long - term portfolios buying and selling bonds to take advantage of increases in market value that may result from investor demand.

What should worry you is the absence of long - term fundamental investors who will buy bonds — intermediated by dealers, sure — when everyone else is selling.

But if bond prices crash, investors will want to take their money out, the funds will need to sell, and all those giant bond funds that provided the bid for bonds on the way up will turn into sellers on the way down.

Convertible bonds are hybrid securities sold to investors who want to enjoy the upside of equities while still benefiting from the downside protection of bonds.

«As the U.S. economy slowed and Europe's debt crisis worsened, investors sought the safety of Treasuries and sold the bonds PIMCO had bet on, leaving the fund trailing 89 % of competitors in August and 67 % this year through Sept. 8.»

Or investors could simply be selling more bonds than they are buying.

BERLIN — Throughout the month, countries caught in the eye of the European financial storm, including Italy, Spain and France, have repeatedly defied expectations, selling big batches of bonds to the public at interest rates significantly lower than investors demanded at the height of the euro crisis late last year.

So when investors hear that interest rates may rise, some assume it's bad for bond investments and want to sell out of the market in a kneejerk reaction.

Lastly, unlike bond mutual funds which can only be purchased or redeemed at end of day, individual bonds can be bought and sold throughout the day providing the investor with more immediate liquidity.

Bond act as both a volatility - minimizer for those investors that can't stomach a large stock allocation and a source of stability during stock market sell - offs for either spending purposes or liquidity for those that need to rebalance into lower stock prices.

The Depression ruined a stock investor's scheme of selling bonds to buy stocks if they started between 1928 and 1931.

(Eventually, the European bonds, which were sold to other investors, paid out when they matured).

Moody's Investors Service, which downgraded Tesla's credit rating further into junk in March, still expects Tesla will need to raise about $ 2 billion selling equity, convertible bonds or debt, to offset the cash it burns this year and securities maturing through early 2019.

Investors would buy cyclical companies, particularly U.S. small caps, and sell bonds.

As the VIX increases, investors get nervous, pushing them to sell equities in favour of bonds and the Canadian dollar in favour of the greenback.

These days, there is no shortage of market commentators suggesting that investors should sell stocks and bonds before another possible market crash.

In the end, the insiders sold out at the top of the market, leaving pension - fund investors with stocks whose prices were falling and bonds that were losing their prospects of being paid off.

And some investors may listen to their advice, believing they can reach their investment goals by buying and selling stocks and bonds at exactly the right time.

If interest rates decline, however, bond prices usually increase, which means an investor can sometimes sell a bond for more than face value, since other investors are willing to pay a premium for a bond with a higher interest payment.

While retail investors may want to sell their soaring stocks to buy bonds, or sell their bonds to buy into the market rally, they shouldn't make any drastic moves, one financial advisor warned Wednesday.

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.

Consider a price - sensitive investor selling a long - dated bond to a liability manager in a rising rate environment.

If the jury found that Hogan was entitled to $ 100 million in damages and Gawker was required to post a bond of at least that amount, the company would not be able to do so without selling itself to a larger company or bringing on outside investors.

The relative lack of liquidity in the bond market and the fact that it is oriented for institutional investors rather than retail investors means that you really want to know where a bond has been trading before agreeing to buy or sell at a given price (be careful not to get ripped off).

«To some degree, investors have become accustomed to a heuristic of «if stocks sell off, then bonds go up.»

We believe that investors who are trying to reduce risk by selling stocks and buying bonds are probably increasing their risk of losing money.

To make things even more difficult, investors are increasingly buying to hold to maturity for the simple reason that if spreads are going to tighten, it is difficult to find a replacement once a bond is sold.

Taxation Of Distributions Besides taxes on capital gains incurred from selling shares of ETFs, investors are also subject to pay taxes on periodic distributions, which can be dividends paid out from the underlying stock holdings, interest from bond holdings, return of capital (ROC) or capital gains — which come in two forms: long - term gains and short - term gains.

While much of the outflows so far have been a result of investors switching out of high yield into safer money - market and government bond funds, Gutteridge believes we have seen the bulk of the selling.

Jan 03, 2017 Not all investors in the stock market are individuals who buy and sell their own hand - picked stocks and bonds.

Although there will still be some amount of buying and selling in the portfolio during that time (for instance, to deal with things like new investors buying into the fund or selling a bond with a declining credit profile), it should be less than what would be experienced in a traditional bond mutual fund.

If interest rates rise between the time a bond is originally purchased by the fund and the time that same bond is sold, this will create a capital loss for the fund and potentially its investors as well.

As rates headed higher, investors sold off municipal bonds, pushing the largest municipal bond fund, iShares National AMT - Free Muni Bond ETF (MUB), to its biggest discount in histbond fund, iShares National AMT - Free Muni Bond ETF (MUB), to its biggest discount in histBond ETF (MUB), to its biggest discount in history.

The municipality issue or sell the bond to investors, the investor or bond holder in exchange gives the municipality an agreed amount of money for a period of time; while the investor is paid a regular interest until the time the total amount is paid off.