Sentences with phrase «term bond investor»

So odds are not on your side as a long - term bond investor right now.

Although this may sound counterintuitive, if you are a long - term bond investor, you may actually favor rising interest rates.

I've read too many posts / articles that outline why a rise in rates is good for long - term bond investors (as that would allow reinvestment at higher rates).

The reason why an inverted yield curve is predictive of economic weakness is that long - term bond investors will settle for lower yields if they start to believe the economy will slow or decline in the future.

In an effort to help you get started, below we take a look at the 25 terms every bond investor should know.

I've read too many posts / articles that outline why a rise in rates is good for long - term bond investors (as that would allow reinvestment at higher rates).

Not exact matches

But longer term, rising rates will be bad for stocks; therefore, investors may want to evaluate their portfolios and move out of some equities and invest more in bonds, she said.

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.»

Wall Street has found a semblance of stability after a roller - coaster week, but some investors are convinced the rockiness in stocks and bonds isn't quite over for one main reason: The markets have yet to fully come to terms with how aggressively the Federal Reserve may respond to surprising economic strength.

For, with long - term taxable bonds yielding 5 percent and long - term tax - exempt bonds 3 percent, a business operation that could utilize equity capital at 10 percent clearly was worth some premium to investors over the equity capital employed.

That's dangerous for pension funds and other large institutional investors across the world, which have been loading up on bonds, and longer - term bonds to boot.

U.S. long - term rates would spike, while investors in Canada would rush to the domestic fixed - income market, setting off a bond rally that would push Canadian yields down «substantially,» said Burleton.

«It is a terrible mistake for investors with long - term horizons... to measure their investment «risk» by their portfolio's ratio of bonds to stocks,» Buffett wrote in the February 24 letter.

In his annual shareholder letter in early March, Mr. Buffett said the assumption that bonds were a worthy risk damper for long - term investors was «a terrible mistake.»

And with a strong - enough economy spurring the Federal Reserve to raise short - term interest rates, bond investors may need to reduce expectations.

Still, corporate bond spreads have come up to around their historical average, providing impetus for institutional investors trying to claw out yield any way they can, even if it means an extraordinarily long - term commitment.

Yardeni, a market historian, coined the term «bond vigilantes» in the 1980s to refer to investors who sell their holdings in an effort to enforce fiscal discipline.

Bonds have historically had little correlation to equities except in market crisis situations, so creating a portfolio of both equities and bonds makes a whole lot of sense as a long - term inveBonds have historically had little correlation to equities except in market crisis situations, so creating a portfolio of both equities and bonds makes a whole lot of sense as a long - term invebonds makes a whole lot of sense as a long - term investor.

ixed income investors are going to begin to see their long - term bond prices plummet and need to be emotionally prepared for their portfolios to lose market value.»

Certainly, it offers an attractive level for longer - term investors such as pension and insurance funds to lock in a relatively decent yield, and will tempt some portfolio managers to buy bonds rather than equities.

Obviously there are other long - term investors in corporate bonds, like insurance companies, commercial banks, etc., who could cushion the blow.

The long - term implication is that investors and the public at large can have more trust in the security and liquidity of the U.S. Treasury bond market.

In addition, some investors successfully build the value of their long - term portfolios buying and selling bonds to take advantage of increases in market value that may result from investor demand.

In our terms, there are value investors for Treasuries 10: There are lots of natural buyers and sellers of interest rates, and if Treasury bonds crash dramatically someone will step in to buy them.

What should worry you is the absence of long - term fundamental investors who will buy bonds — intermediated by dealers, sure — when everyone else is selling.

For bond investors with a short - term investment horizon, it is absolutely critical to think about rising interest rates.

Further Reading: What Returns Can Investors Expect in Long - Term Treasuries Are We Witnessing a Melt - Up in Long - Term Bonds?

There is no doubt that, based on pure, cold, logical data, stocks are the single best long - term performing asset class for disciplined investors who are not swayed by emotion, focus on earnings and dividends, and never pay too much for a stock, often as measured on a conservative beginning earnings yield relative to the Treasury bond yield basis.

«When you're creating a plan for that mix of stocks and bonds, for the newer investor, it's really powerful to see the relationship between adding more stocks — which adds to your return in the long term, but also adds to the risk — and the likelihood that you're going to see many more ups and many more downs,» says Francis.

This is especially true for those investors who look to their bond funds as a source of long - term income.

-LSB-...] Further Reading: A History of Bond Market Corrections What Returns Can Investors Expect in Long - Term Treasuries?

High - quality bonds protect investors during times of market stress and deflation, providing a diversification benefit with little - to - no correlation to stocks in the short - term.

Fidelity's Julian Potenza seconded Darda's emphasis of muni bonds, saying «investors should consider keeping the portion of their fixed - income portfolio that is currently earmarked for liquidity relatively short, in terms of duration.»

For bond investors with a medium - to long - term investment horizon, things are more complicated.

Investors in Treasury notes (which have shorter - term maturities, from 1 to 10 years) and Treasury bonds (which have maturities of up to 30 years) receive interest payments, known as coupons, on their investment.

Given those durations, an investor with 15 - 20 years to invest could literally plow their entire portfolio into stocks and long - term bonds, in expectation of very high long - term returns, with the additional comfort that their financial security did not rely on the direction of the markets, thanks to the ability to reinvest generous coupon payments and dividends.

What we have really seen over the past several years, in terms of the appreciation of markets and the decline of interest rates based on what the Fed has been doing, is a result which has eliminated the possibility of investors in bonds and stocks to earn an adequate return relative to their expected liabilities.

A quick glance at the graph suggests that the wealth transfer from bond to stock investors has declined over the last 50 years and may now represent a much more modest premium for long - term stock investors.

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For long - term investors, long - term bonds still have a role to play in a diversified portfolio.

Over the last twenty years, investors have witnessed a steady decline in the interest rate on investment grade bonds, GICs and term deposits.

So if investors expect short - term rates to be zero for another 4 years, it would be reasonable for stocks and bonds to be about 16 % higher than historical valuation norms.

It also found that during the same period, the average fixed - income investor earned only a 6.08 % return per year, while the long - term Government Bond Index reaped 11.83 %.

And even if the indicator was valid (counterfactually), the article asks readers to accept as given that earnings are properly reported here, that they will grow by nearly 50 % over the coming year, and that investors are willing to key the long - term return they require from stocks to the yield on 10 - year bonds, which has been abnormally depressed in a flight to safety.

Bonds, however, the investor's go - to asset class for safety, have experienced two separate corrections of 10 % or more in that time when looking at long - term U.S. treasury bBonds, however, the investor's go - to asset class for safety, have experienced two separate corrections of 10 % or more in that time when looking at long - term U.S. treasury bondsbonds.

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.

Apparently under the gold standard, bond investors regarded long - term prices as stable, and took little heed of short - term economic and price trends.

When investing in corporate bonds, investors should remember that multiple risk factors can impact short - and long - term returns.

That's why an investor should have money in bonds, so that your short - term needs, your intermediate - term needs can be met from bonds,» he told «Closing Bell.»

For investors seeking long - term total returns, primarily in the U.S. Treasury market, with added emphasis on the protection of purchasing power through inflation hedges such as precious metals shares and other bond - market alternatives.