Sentences with phrase «nominal bonds do»

Because TIPS protect investors against inflationary concerns and nominal bonds do not, they behave differently from one another.

Not exact matches

Finally, while there is certainly a risk that bonds deliver lousy returns going forward, I view the chances of significant nominal drawdowns as pretty far down the list of concerns, regardless of what the Fed does.

nominal zero coupon bonds trade below par because we expect money to buy less in the future than we do today.

Over the long term the nominal return on a duration - managed bond portfolio (or bond index — the duration on those doesn't change very much) converges on the starting yield.

Bonds may not offer tremendous nominal value, comparatively speaking, in the current market, but they do generally offer peace of mind and stability which, for some, may be more important than they currently realize.

@ Andrew / Hariseldon — short nominal bond funds will recover quite quickly from a rise in interest rates but the research I've read says they do badly in unexpected inflation scenarios.

Holding an individual bond to maturity will result in the return of principal (assuming the bond issuer doesn't default), but those nominal dollars will be worth less with inflation and during periods of higher interest rates.

It is important to note that the nominal yield does not estimate return accurately unless the current bond price is the same as its par value.

Portfolio theory does not properly account for the fact that stocks are far riskier than bonds often resulting in portfolios that are not only stock heavy, but even more stock heavy than the nominal allocations imply.

And buyers of nominal bonds are taking risks that investors in TIPS don't — the risk of unexpected inflation.

How does Pascal's Wager relate to the decision on whether to choose nominal or real return bonds?