Sentences with phrase «on risky asset»

Market forces pushed the returns on the safe asset classes up much higher than normal while overvaluation pushed the return on the risky asset class much lower than normal.

Plus you get an inflation hedge, tax relief and exposure on a risky asset.

If were going to have fiat money, do it in such a way that bubbles do not develop, which means not caring about the effects of policy on risky asset markets.

Asian shares edged higher on Friday, turning positive for the year, while the US dollar weakened broadly after the Federal Reserve's cautious stance on further rate increases prompted investors to rebuild their bets on riskier assets.

All they have done is to reduce prospective future returns on risky assets to zero as well.

Because the bank does not bear the downside, it has an incentive to load up on the riskiest assets available in order to maximize its expected profit.

Alternatively, you could believe that the risk - free rates were correct and that the higher returns you expect on risky assets are appropriate given the volatility you are taking on.

This is on top of the problem that when high - quality long interest rates are so low, it is typically a bad time to try to make money in financial assets, because returns on risky assets are typically only 0 - 2 % percent higher than the yield on long BBB / Baa debt over the long run.

When you implicitly and explicitly suggest that rates will remain lower for longer, people begin to count on risky assets being safer than they are; similarly, the size of debts can become so large that those who trusted the policy makers lose the ability to service the debt (let alone pay it back) when borrowing costs go up.

Or round out your core portfolio with small bets in index funds that focus on riskier asset classes, such as an ETF that owns Japanese stocks or an index fund that specializes in biotech stocks.

It also mitigates risk by requiring you to draw down more quickly in the early years of retirement on your risky assets — your investments.

The odds of at least one large bad streak of returns on risky assets during retirement is high, and few retirees will build up a buffer of slack assets to prepare for that.

Regulators can require insurers to hold more capital to guard against losses on riskier assets.

Not exact matches

European markets closed marginally higher on Tuesday as tensions between the U.S. and North Korea showed signs of subsiding, prompting investors to return to riskier assets.

«So they're more willing to bet on the market and stocks and risky assets.

Gold prices have seen a steady decline since a 2011 peak as the bull market stretched on and riskier asset classes found favor over safe havens.

The market expecting the Fed to remain on hold, which «should allow premia to return in the curve» and limit a downturn in risky assets.

Valuations of risky assets are still stretched, and liquidity mismatches, leverage, and other factors could amplify asset price moves and their impact on the financial system.

Benchmark spot gold prices were on course for an over 1 percent decline this week, pressured by a thaw in tensions on the Korean peninsula and a stronger dollar as investors looked to riskier assets such as equities.

But taking out debt to buy an asset as volatile as Bitcoin — as some investors seem to be doing with their credit cards — is risky on a personal finance level.

NEW YORK U.S. stocks ended mixed on Wednesday while most other global shares rose, as investors were drawn to riskier assets because of upbeat earnings from companies in Europe and the United States.

Christopher M. Sulyma filed a lawsuit on behalf of two proposed classes of participants in the Intel 401 (k) Savings Plan and the Intel Retirement Contribution Plan, claiming that the defendants breached their fiduciary duties by investing a significant portion of the plans» assets in risky and high - cost hedge fund and private equity investments through custom - built target - date funds.

With $ 30 billion of assets to sell in the wake of its acquisition of BG, Shell is a riskier but possibly more rewarding bet on the oil price.

Plaintiff Christopher M. Sulyma, on behalf of two proposed classes of participants in the Intel 401 (k) Savings Plan and the Intel Retirement Contribution Plan, claims that the defendants breached their fiduciary duties by investing a significant portion of the plans» assets in risky and high - cost hedge fund and private equity investments.

This very low market volatility can lead investors to take on more risk, and in a period of still relatively low interest rates, to «reach for yield» — that is, buy riskier assets than one would otherwise, in order to achieve a desired profit or savings goal.

However, it's only risky on assets you have no control over or when you over leverage without looking at the cash flow closely after debt service.

Yields on high - yield corporate bonds narrowed (centre panel) and record low government bond yields pushed up valuations of risky assets (right - hand panel).

There are no magical tailwinds you can bank on, and odds are that shifting to risky assets — the equivalent of leaning on the throttle — will only leave you further behind.

Losses in risky assets will dissipate investor confidence, undermine economic activity, and leave the Fed with little choice other than to step on the accelerator for more easy money.

Federal deposit insurance, since its birth in the 1930s, has meant that a comparatively risky bank (one with capital less adequate to cover potential losses on its asset portfolio) no longer faces a penalty in the market for retail deposits.

Instead, focus only on how much you want in equities overall compared to less risky asset classes and on collecting the equity premium.

This is how riskier asset classes, such as emerging markets, can improve returns and reduce portfolio risk even though an asset class may be considered volatile on its own.

Correlation relates to the fact that a low volatility environment encourages investors to move into riskier assets to get decent returns on their investments.

If you find yourself on the efficient frontier past the tangency point (see above), one can easily show that reducing risk involves no cash holdings, but rather keeping all of your portfolio in risky assets.

Also, financial insiders are still reporting there is a lot of cash on the sidelines after people stopped investing in equities and other risky assets during the bear market.

On the one hand, declining bond market activity and the persistence of low - risk arbitrage opportunities imply liquidity is impaired, while, on the other, low volatility and high demand for risky assets suggest that liquidity is alive and welOn the one hand, declining bond market activity and the persistence of low - risk arbitrage opportunities imply liquidity is impaired, while, on the other, low volatility and high demand for risky assets suggest that liquidity is alive and welon the other, low volatility and high demand for risky assets suggest that liquidity is alive and well.

This means investors who want higher returns must consider taking on greater risk — by increasing leverage or moving into riskier asset classes.

Since March 2009, the S&P 500 Index has had a total return of approximately 250 %, driven by two primary factors: First, super-easy global monetary policy in the wake of the banking crisis, which drove down returns on safe assets to the point where risky assets became a much more compelling proposition than is typical.

Broadly, the reform called on banks to fortify their balance sheets through recapitalization, writing on / off underperforming liabilities and assets, and indiscriminately reducing «risky» underwriting behavior.

Virtually all professional economists agree that calculating the value of guaranteed pension benefits using the assumed return on a portfolio of risky assets «understate [s] their pension liabilities and the costs of providing pensions to public - sector workers.»

The chart below comes from the Pew Center on the States, and it shows how states have over time increased their exposure to risky assets.

Barring an unexpected twist from the German Constitutional Court on September 12, I think we could be looking at a monster rally to finish the year in most risky assets.

Covariance is a measure of the degree to which returns on two risky assets move in tandem.

For years, the thought has been that allocation should slowly adjust as you get closer to your financial goals; meaning a heavier focus is put on conservative assets like bonds and taken from riskier ones like stocks.

While this can be less risky for borrowers as they don't have to fear of losing their assets due to defaulting, though the risks can be heavy on the lenders.

I think that risky assets have their place in all portfolios, just in varying amounts depending on your investing strategies and goals.

Rightly or wrongly, they see loans to these enterprises as riskier bets, since there's a good chance they might fail and the lender will be required to seize assets or foreclose on property to get its money back.

Instead, they are rhetorical, based on the view that somehow the Fed's actions create a «backstop» that will prevent potential losses in risky assets.

That imbalance of eagerness between buyers and sellers has clearly affected prices of risky assets, but it does not generate new cash flows - it simply raises the valuation that the market places on existing streams of future cash flows, and thereby lowers the subsequent rate of return on holding those securities.

It's true that some see peer - to - peer lending as a risky asset class because you are relying on strangers to pay the loan back.