Sentences with phrase «volatility in a portfolio because»

Exposure to the US dollar reduces volatility in a portfolio because the currency has negative correlation with the global equity markets.

Not exact matches

While an aggressive type portfolio will naturally fluctuate over time and has more «volatility,» this is nothing to get scared about because you are saving this money for the long term and over a 10 + year investing horizon you are going to make more money investing in stocks than in bonds.

Now, because stocks have become more correlated with each other and somewhat more volatile, today's graphs show that 10 - 15 securities are needed to get the same reduction in portfolio volatility.

What's more, if you choose stocks that have a low or inverse correlation with one another - an oil producer and an airline, for example - you further reduce the volatility in your portfolio, because the stocks react in different ways to the same events (a change in oil prices, for instance).

It is invested primarily in the credit market, not so much in government bonds because government bond yields are so low, but we're looking for absolute returns even if interest rates go up, so some of the portfolio, a significant piece of it actually, is floating rate, so if interest rates go up, you just get higher cash flows, which will support higher returns, and the rest of the portfolio is in relatively short maturity bonds, which will have some price volatility and if there's bad market conditions, will have temporary losses, so the goal is to offer something that is absolute returns.

You are looking to invest in dividend stocks because they pay steady income while reducing the volatility in your stock portfolio.

I personally prefer using unhedged positions because (a) It is cheaper (b) In the long run, currency effects will average out (c) The value of hedging is questionable when a basket of currencies are involved and (d) While currencies on their own have zero expected return over cash, adding them to a portfolio reduces volatility and offers diversification benefits.

This is because simply ranking bonds by yield volatility across the universe can potentially result in highly concentrated portfolios in duration or quality, which in turn can cause greater portfolio volatility.

@Joseph: The Sleepy Portfolio has high volatility because it is 75 % in stocks.

Because of the inherent volatility of stock prices, there will be times when your portfolio will show profits (and sometimes it will be in red too).

I've already discussed that in mixed portfolios bonds provide ballast because of their lower volatility and lower returns.

Our research on the Fundamental Index ® concept, as applied to bonds, underscores the widely held view in the bond community that we should not choose to own more of any security just because there's more of it available to us.10 Figure 9 plots four different Fundamental Index portfolios (weighted on sales, profits, assets and dividends) in investment - grade bonds (green), high - yield bonds (blue) and emerging markets sovereign debt (yellow).11 Most of these have lower volatility and higher return than the cap - weighted benchmark (marked with a red dot).

Because wind prices can be locked in up front, businesses incorporating wind into their energy portfolios are better equipped to hedge market volatility in traditional fuels markets caused by supply shocks.