Sentences with phrase «substantial interest rate risk»

While the portfolio of high yield bonds may offer additional return potential, high yield bonds are subject to substantial interest rate risk.

While the portfolio of high - quality bonds may offer additional return potential, long - term investment grade bonds are subject to substantial interest rate risk.

Not exact matches

About the only time interest rates pose a substantial risk of precipitating a crash is when central banks become concerned about overheating in the economy and are willing to provoke a recession to cool things off.

In Australia, the lifting of interest rates and credit controls, and increased competition from foreign banks, contributed to a surge in credit growth, and a substantial increase in risk taking in the financial sector, and in the community generally.

Under these conditions, there is substantial risk that the additional stimulus from larger deficits will lead to higher inflation and interest rates.

As usual, I don't place too much emphasis on this sort of forecast, but to the extent that I make any comments at all about the outlook for 2006, the bottom line is this: 1) we can't rule out modest potential for stock appreciation, which would require the maintenance or expansion of already high price / peak earnings multiples; 2) we also should recognize an uncomfortably large potential for market losses, particularly given that the current bull market has now outlived the median and average bull, yet at higher valuations than most bulls have achieved, a flat yield curve with rising interest rate pressures, an extended period of internal divergence as measured by breadth and other market action, and complacency at best and excessive bullishness at worst, as measured by various sentiment indicators; 3) there is a moderate but still not compelling risk of an oncoming recession, which would become more of a factor if we observe a substantial widening of credit spreads and weakness in the ISM Purchasing Managers Index in the months ahead, and; 4) there remains substantial potential for U.S. dollar weakness coupled with «unexpectedly» persistent inflation pressures, particularly if we do observe economic weakness.

With interest rates still hovering near the lowest levels they've ever been in 5,000 + years of recorded human history, it's very difficult to achieve a significant investment return without taking on substantial risk.

While U.S. Treasury or government agency securities provide substantial protection against credit risk, they do not protect investors against price changes due to changing interest rates.

At the other end, high - yield bonds pay a higher interest rate than Treasury securities, but there's a substantial risk that the issuer won't be able to keep up with payments or pay back your principal.

«Increasing the insurance premium on FHA loans is simply a reflection of the substantial risk the administration has taken on in recent years,» says Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA - based financial information publisher and interest rate tracker.Rick Sharga Vice President of ReatyTrac says foreclosures were up 21 % from a year ago and 120 % from two years ago and it could get worse.

«Increasing the insurance premium on FHA loans is simply a reflection of the substantial risk the administration has taken on in recent years,» says Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA - based financial information publisher and interest rate tracker.