Sentences with phrase «lower bond term»

Not exact matches

That data raised a fresh round of questions about how the Federal Reserve will proceed on further cutting back on its massive monthly bond purchases, which have kept long - term rates low and encouraged a strong rally on equity markets.

What that means is that you are in an environment that is going to have further trouble in terms of investment returns that are in areas that are based on economic growth and areas that do relatively well like bonds... Broadly speaking, I think that investors should be looking for lower prices on most risk assets in these developed countries with the exception of Japan.»

In the short - term, however, this increased leverage may actually be bullish for junk bonds, corporate bonds, emerging market debt and mortgage - backed securities as it brings higher prices and lower yields, he said.

But, «the U.S. and the Bank of England have gone to more extremes because they have interest rates below the Bank of Canada's, and they've also been buying bonds to lower longer term interest rates,» Shenfeld added.

Still, combine the indications of the short - term bond market with today's 5 % GDP news and you get the sense that stock traders betting on low interest rates for longer periods of time may soon have to bail out.

In March 2018, SES secured an eight - year EUR 500 million Euro Bond at a low annual coupon of 1.625 % which allows SES to refinance an upcoming debt maturity at more favourable terms.

So, putting the two together, we want to own short - term high - coupon bonds when rates are rising, and low - coupon long - term bonds when rates are trending down.

Moreover, what concerns Mr. Buffett are the poor prospects for long - term bonds, especially given their current low yields.

And corporations have spent the last decade issuing longer - term bonds to take advantage of low interest rates.

While U.S. savings bonds have lost popularity as a means of long - term savings due to the low interest rates they currently earn, some retirees have been holding on to bonds that were issued when rates were higher.

I see no reason to own bonds during this historic, endless creep higher in stocks with low volatility; 2.8 percent is my medium - to long - term objective.

«Apple of course has huge amounts of cash, but... the cost of borrowing now is so unbelievably low that issuing long - term bonds... is actually a very smart thing,» Schwarzman said on CNBC.

The Fed had lowered interest rates down to zero in terms of short - term rates and that pushed bond yields down.

Residential real estate had taken on a healthy pace in late 2012 and early 2013 but has slowed since the Federal Reserve started talking about reducing its monthly bond purchase, which helps keep long - term interest rates low.

US election + BREXIT = populist repudiation of era of inequality, globalization, wage deflation; cements BofAML themes of peak Liquidity, Inequality, Globalization + Main St over Wall St. Electoral trends could mark secular low in long - term bond yields (Chart 1).

Its underlying index selects and weights its bonds by market value, and this method yields a portfolio that aligns well with our benchmark in terms of credit tranches and maturity buckets, with the only notable difference being a slightly lower YTM.

-LSB-...] the long - term returns on bonds will certainly be lower than average based on the current yields.

Global bonds are vulnerable due to low current yields, depressed term premia1 and the desire of developed - market central banks to unwind unconventional policies.

As Russ Koesterich points out, cash typically produces lower returns than stocks or bonds, and once you invest for both inflation and taxes, average long - term rates are negative.

Yes, cheap money polices did help stabilize a reeling housing sector, that shouldn't be dismissed, but what else does the Fed have to show for near - zero short term interest rates and the fortune spent lowering longer term rates through its bond buying program?

With extraordinary low interest rates and modest inflation, investing in long - term bonds to capture as much yield as possible may seem like a smart move.

The institutions are not only using the money to meet their own short - term financing needs, they are also borrowing additional money to purchase the bonds of troubled countries and earn the spread between the yields on those bonds and the much lower rate the ECB is charging them for money.

Although this rally can definitely continue over the short - term, I think over the long - term intermediate bonds are probably a better bet for a lower risk portion of the portfolio.

The rates that have responded most significantly to lower borrowing costs are short - term loans for financial speculation, above all for derivatives and related buying or selling of stocks and bonds on margin — enormous gambles on which way the dollar, the stock market and interest rates may go.

Over the past year, the bond yield curve has been positive but flattening (short - term yields remained lower than long - term yields, but the differential has narrowed).

The implications of moderately higher rates: Expect low or negative returns for government bonds globally in the medium term.

These investors may have to accept lower long - term returns, as many bonds — especially high - quality issues — generally don't offer returns as high as stocks over the long term.

For instance, a portfolio with an allocation of 49 % domestic stocks, 21 % international stocks, 25 % bonds, and 5 % short - term investments would have generated average annual returns of almost 9 % over the same period, albeit with a narrower range of extremes on the high and low end.

Combined with low growth and aging population, this is likely to hold down long - term bond yields in Europe and Japan.

Investments in companies engaged in mergers, reorganizations or liquidations involve special risks as pending deals may not be completed on time or on favorable terms, as well as lower - rated bonds, which entail higher credit risk.

The implications: Expect low or negative returns for government bonds globally in the medium term.

Put simply, even taking account of current interest rate levels, and even assuming that stocks should be priced to deliver commensurately lower long - term returns, we currently estimate that the S&P 500 is about 2.8 times the level at which equities would provide an appropriate risk premium relative to bonds.

But long - term government bond yields fell to record lows for many euro area countries after a speech by ECB President Draghi on 21 November, which stressed that the ECB will do what is required to raise inflation and inflation expectation by adjusting the size, pace and composition of asset purchases, if the currently announced policies prove to be insufficient.

The idea that real interest rates — that is, adjusted for inflation — will be lower than they have been historically is reflected in the pronouncements of policymakers such as Federal Reserve chair Janet Yellen, the medium - term forecasts of official agencies such as the Congressional Budget Office and the International Monetary Fund and the pricing of government bonds whose payments are tied to inflation.

Buffett also suggests how to allocate: «My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I've laid out in my will... Put 10 % of the cash in short - term government bonds and 90 % in a very low - cost S&P 500 index fund.

Even without suggesting that money will move «out of cash and into stocks,» one might argue that relative valuations are too wide, and that stocks should be priced to achieve lower long - term returns, given the poor returns available on bonds.

Investors typically own short - term bond funds as a low - risk vehicle to preserve their principal, so losses in this segment tend to be more upsetting than a downturn in investments such as stock funds where volatility can be expected.

Interest rates have continued to be pushed lower and lower and lower and most of this is because the Fed keeps on adjusting that federal fund's rate and adjusting interest rates down in the way that they do that is by putting cash into the market and buying back bonds or short - term bonds with the federal fund's rate.

If $ TBT (which moves in the opposite direction of long - term bond prices) is poised to head higher, it means long bond prices are primed to move lower.

For instance — why would Apple (or these other multinationals) repatriate any cash rather than issue Aussie or Euro bonds which have lower long term rates.

A comment many of them made was that they believed long - term bonds were way overpriced, yet they felt forced to own them to lower the risk in their clients» portfolios.

The answer is that Fed policy is the primary factor driving the returns of short - term bonds, meaning that they tend to hold up much better than long - term debt when the Fed is expected to keep rates low as was the case in 2013.

Short - term government bonds generally offer stability and low growth and are the bungee in your portfolio that slows its decline in value when equities plunge.

However, assuming rates do rise over the intermediate to long - term, there can be tremendous opportunity cost in owning bonds with low coupons and lengthy maturity.

When investors begin to focus on the potential for Fed rate hikes, short - term bonds will almost certainly begin to experience lower returns and — depending on the type of fund — greater volatility than they have in years past.

The SNB's «profit was lifted by a trio of positive forces: Low bond yields preserved the value of its foreign bonds; higher equity prices raised the value of SNB holdings... and the weaker Swiss currency made those foreign assets worth more in franc terms.»

Higher oil prices would reinforce current market trends based on reflation: rising long - term bond yields and a shift out of perceived safer assets — bond proxies and low - volatility stocks — and into cyclical assets such as EM.

Since rising interest rates means the bond's fixed rate is not competitive against newly issued bonds at higher market rates, then it stands to reason that longer - term bonds (those with longer to pay at the lower rate) are going to see their prices fall further than short - term bonds.

In terms of equities, the S&P 500 had its best month in four years in October, while booming corporate bond sales continued to meet high demand, appearing to reflect confidence in the strength of the US corporate sector as well as the persistence of low market interest rates.

One popular bond investing strategy is called «laddering» and provides a trade - off between lower rates on short - term bonds and higher interest rate risk of long - term bonds.