Sentences with phrase «long duration bond»

But within the right context, thinking of the stock market like a long duration bond has many advantages:

The second example was when a bulge bracket firm called me and asked me if I owned a certain very long duration bond.

BlackRock Long Duration Bond Portfolio is changing its name on July 29, 2013, to BlackRock Investment Grade Bond Portfolio.

Short duration bond strategies have historically had lower yields than long duration bond strategies, but when interest rates rise, short duration strategies may experience a smaller price drop.

But when rates rise, long duration bond strategies can experience sharp price declines.

Short duration bond strategies tend to have lower yields than long duration bond strategies, but when interest rates rise, short duration strategies will experience a smaller price drop.

Since interest rates are at historical lows, we do not recommend investing in long duration bond funds at this time.

Short duration bond strategies tend to have lower yields than long duration bond strategies, but when interest rates rise, short duration strategies will experience a smaller price drop.

He said the team thinks there aren't enough rate hikes priced into the fixed - income market and therefore he likes the long end of the yield curve, or longer duration bonds.

The only shortcoming is that (I assume) that the bonds you are using are long duration bonds, which are much more volatile and suffer deeper losses when interest rates rise, compared to shorter duration bonds.

ANSWER: - Morgan Stanley's Global Investment Committee supports that interest rate normalization will provide headwind for investors using bonds for principal preservation, as rates rise its likely longer duration bonds will fall.

High Quality, Long Duration Bonds Perform Well When Times Get Tough Can we improve upon this portfolio construction?

The market will do so by increasing the price of the high quality, long duration bonds that we currently favor to levels that no longer offer a compelling return and margin of safety.

Investors who had the foresight (What does the Bond Market Know, May 7, 2014) and Bond Market Clues, May 14, 2014) to buy long duration bonds have earned many years» worth of returns in the last few months.

That same leverage aversion exists among fixed income investors — longer duration bonds may be over-priced on a risk - adjusted basis compared to similar bonds of a shorter maturity (Barclays).

Longer duration bond returns should reflect expectations about inflation.

Are you sure long duration bonds give a high yield?

This makes long term bonds much less attractive because we are not being rewarded for taking a risk in holding longer duration bonds.

Tobacco settlement bonds tracked by the S&P Municipal Bond Tobacco Index are down nearly 9 % year to date as yields have risen by over 255bps as the credit risk of these long duration bonds is questioned.

The longer duration bonds obviously suffer the most.

Of course, if you own a longer duration bond portfolio these numbers will not look nearly as friendly.

If an investor tries to build income by just adding longer duration bonds, they won't be able to get very far.

This means they are not as sensitive to interest rate changes as longer duration bonds.

I think people fail to remember the inverse relationship that bond prices and interest rates have... there is potentially a lot of capital risk for people locking up money in longer duration bonds.

Given all the furor over investing in long duration bonds for pensions versus equities, it is funny that the PBGC rejected the growing conventional wisdom that DB plans should invest in safe long bonds.

With a few exceptions, it has paid recently for bond managers to play on the riskier areas of their mandates, with the exception of high quality long duration bonds, which were the big winners last year, and the big losers this year so far.

For shorter duration bonds with high levels of credit risk, interest rates will not impact the value of these securities to the same degree as longer duration bonds with low levels of credit risk.

If long - term inflation expectations are anchored, this can actually mean that shorter duration bonds can underperform longer duration bonds.

Notable exceptions include an inverted yield curve, where shorter duration bonds have higher yields than longer duration bonds.)

These high yield, long duration bonds are impacted by both credit risk driven by declining tobacco use and the possibility of rising rates.

Throughout the process, we take advantage of short and long duration bonds and loans as interest rates change.

So, longer duration bonds are a good thing when rates are rising?

The pace of the current hiking cycle and the modest flattening of the yield curve over the past two years have been positive for long duration bonds.

And the big caveat here is that longer duration bonds or bond funds (such as 20 or 30 years) are problematic regardless, because their prices will decrease much more precipitously when interest rates eventually rise.

When interest rates begin to rise then I'll think about whether to sell some of the longer duration bonds.

Back when dividend yields were higher, and corporate bond yields were higher, both absolute and relative yield managers flourished as interest rates and dividend yields crested in the early 1980s, and the stocks paying high dividends got bid up as interest rates fell, much as the same thing happened to zero coupon and other noncallable long duration bonds.

Not exact matches

It buys long - term government bonds, including those with durations longer than three years, in what is dubbed «rinban» market operations.

Treasury bonds, which tend to have longer durations, now represent more than one - third of the index compared with 22 percent in 2007.

According to Morningstar Direct, $ 59 billion is invested in long - term bond funds and exchange - traded funds (defined as portfolios with average durations above six years).

In order to understand the impact of longer duration and low yields, let's use a real - life example of one of the largest bond funds today and look back at its history.

The longer the duration, the more sensitive a bond portfolio is to interest rate changes, so HYGH's much shorter duration is its protection against higher rates.

In the fixed - income arena, longer - duration1 bonds tend to be more negatively impacted when interest rates move higher as compared with shorter - duration fixed income securities.

A key factor that could turn the tide for sovereign debt yields is the Bank of Japan, which meets Tuesday and Wednesday, and may decide to stop buying longer - duration bonds, according to reports.

Given those durations, an investor with 15 - 20 years to invest could literally plow their entire portfolio into stocks and long - term bonds, in expectation of very high long - term returns, with the additional comfort that their financial security did not rely on the direction of the markets, thanks to the ability to reinvest generous coupon payments and dividends.

In last week's market comment, I emphasized the shift in durations that we've observed in recent quarters, with stock durations plunging and bond durations getting much longer.

The longer the «duration», the more the bond price will fall when interest rates rise.

This could be a drag on current growth and cause risk - on / risk - off gyrations, making long - duration bonds useful portfolio diversifiers.

Specifically, longer - duration bonds are reasserting their role as an effective ballast to equity risk and can be especially helpful in equity - centric portfolios.

Each state - specific category includes long, intermediate, and short duration bond funds.

All else equal, volatility in bond prices from interest rate moves is higher the longer you go out on the maturity and duration spectrum and the lower the level of interest rates.