Sentences with phrase «longer duration bonds»

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.

Since there is an inverse relationship between bond prices and interest rates, this represents a huge potential capital risk for longer duration bonds.

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

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.

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

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.

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.

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

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

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.

Longer duration bond returns should reflect expectations about inflation.

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

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.

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.

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

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.

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.

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.

While still low by historical standards, the spike in yields has returned some value to long duration bonds, which now appear more reasonable, or at least less overpriced.

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.

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.

The longer duration the bond the larger the swing.

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.

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).

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.

Recent arbitration results have been positive but uncertainty over future disputes and tobacco consumption are pulling these long duration bonds down.

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.

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

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.

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.

Don't forget, however, that money you expect to use within a relatively short time period should not be invested in volatile assets such as stocks or long duration bonds.

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?

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.

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