Sentences with phrase «when risky assets»

When risky assets are held by those with weak balance sheets, it is a recipe for disaster.

(Recall that when all risky assets plummeted in 2008, the US dollar soared.)

When risky assets have a bad time, they may behave badly as a group.

But you don't buy bonds for total returns; you buy them for income, and diversification; they tend to do well when risky assets break down.

When risky assets get very correlated with each other, and the only alternative game to play is buying high quality bonds, it is an unstable situation that portends lower risky asset prices.

The exposure will be revised as the portfolio value changes, i.e., when the risky asset performs and with leverage multiplies by 5 the performance (or vice versa).

Not exact matches

Unicorns were created in the aftermath of the financial crisis, when the low interest rate environment prompted investments in riskier assets, such as the stock of privately held companies.

He says: «When I'm dealing with a business owner, I always try to point out to him or her that concentration of assets is a very risky proposition.

These include difficulties in complying with KYC and AML rules when dealing with digital assets; losing business to less risk - averse companies that are willing to «engage in business or offer products in areas we deem speculative or risky, such as cryptocurrencies;» and (like J.P. Morgan) the potential need to spend large sums while attempting to keep up with shifting technological norms.

However, when evaluating the enthusiasm in today's market for farmland, I am reminded of the investing adage that it is not assets that are risky, but human behavior that makes them so.

The weakness of this approach was revealed in 2008 and during the European debt crisis when supposedly safe assets turned out to be dangerously risky.

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.

In the April 2016 version of their paper entitled «Volatility Managed Portfolios», Alan Moreira and Tyler Muir test the performance of a simple volatility timing approach that lowers (raises) exposure to risky assets when volatility of recent returns for those assets is relatively high (low).

And it's the uncertainty of the price you'll get for your risky assets like shares when you need to sell them that is behind the shift into bonds and cash.

Empirical studies find that household savings will typically decline when interest rates fall.17 This suggests that workers, instead of saving more, generally choose to invest in riskier assets, work longer or earn lower retirement incomes.

Indeed, history has shown that when prices for risk - free assets (like Treasuries) fall to attractive levels, investors often sell their risky assets and purchase Treasuries.

When reading «The Intelligent Investor» they claim that you can increase you position to 100 % stocks (risky) if you meet a number of criteria, one of which is liquid assets to pay for living expenses for 1 year.

Yes, there will be slightly larger short - term losses with the addition of the more risky asset classes, but these asset classes also rebound much faster when the market turns around.

You keep your risky assets in a separate long - term bucket and avoid selling them when markets are down.

However, I'm concerned when people tell investors they «need to invest more in assets that are riskier.»

What it says is that when you invest in a risky asset, you have to receive a return that is higher than what you could get if you had invested in a risk free security.

When the Fed takes the punchbowl away, bond yields should rise and most risky assets — like stocks — should fall.

Until investors learn the what, when and why of Fed policy guidance, riskier assets will remain volatile.

In the April 2016 version of their paper entitled «Volatility Managed Portfolios», Alan Moreira and Tyler Muir test the performance of a simple volatility timing approach that lowers (raises) exposure to risky assets when volatility of recent returns for those assets is relatively high (low).

I sounded an early alarm to reduce riskier asset exposure on December 18, 2014 when the Federal Reserve settled its last money creating, credit - fueling bond purchase (a.k.a. «QE3»).

In doing so we are reducing the portfolio's exposure to downside when high risk assets become riskier late in the cycle and adding to high risk assets during downturns when they become less risky.

A traditional static indexing approach leaves an investor overweight the riskiest assets at the riskiest times and underweight those low risk higher yielding assets when their returns are likely to be highest.

Risky assets should not get a heavy weight when the proceeds will be needed within five years.

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.

There is an ongoing debate about the merits of owning «risky and complicated» futures contracts as compared to owning «simple and convenient» exchange traded funds (ETFs) when you are trying to gain exposure to commodities (or any asset category, for that matter).

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 goWhen 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 gowhen borrowing costs go up.

When discussing asset allocation with clients, do you break down risky vs. safe options?

When there is little difference in risk premia (expected return) between cash and risk assets (equities), risk assets becomes drastically more risky.

Those who say a person should invest in riskier assets when young are those who equate higher returns with higher risk.

Although the price has held up and I could have been receiving the 6 - 7 % yield for the last 2 years, it was a much riskier asset than when I bought it (some shares were bought with a 25 % + / - yield) and no margin of safety.

Many of us are very comfortable with real estate as an asset class as we believe it is one of the less risky assets to own and offers comparatively highest return when compared to any other asset class.

Since commodities are a risky asset, they are a class where the returns are noticeably impacted by fear before the financial crisis and after, when quantitative easing began.

More literate households hold riskier positions when expected returns are higher, they more actively rebalance their portfolios and do so in a way that holds their risk exposure relatively constant over time, and they are more likely to buy assets that provide higher returns than the assets that they sell.

The magic of diversification is that you can take two risky assets, and when you blend them, the result becomes less risky because they zig and zag at different times.

«When volatility rises, asset prices have to reprice lower,» he says, noting that «most investors today are skewed toward very risky portfolios.

Similarly, when people swear off investing in risky assets, markets tend to perform really well.

When you combine risky assets together, the overall risk of the portfolio goes down — that's one of the main principles of diversification.

When too many unprepared people are fully invested in risky assets, there's a nasty tendency for the market to have a significant decline.

The fears got worse when the Fed raised rates as evidenced by the spiking correlation between the risky assets, stocks and commodities.

At some point after 10 - 15 of investing in stocks only, I do plan to transfer a percentage of the portfolio to less risky assets of fixed income to reduce the risk of losing money due to stock market fluctuations when approaching her start date.

The idea that stocks are a risky asset class is rooted in the ideas about how stock investing works that were developed in pre-Shiller days, when we did not know that long - term returns are predictable.

Second, keep in mind that these are inherently riskier assets, and while they tend to get hit worse when things go bad, there is also potential for high rewards when things go well.

This simply admits that there are times when it is wise to reduce exposure to risky assets.

I think it is also important to read few books on emotional intelligence especially when dealing in risky assets.

When Lamm announced his impending retirement in 2001, the school had an aggressive allocation to risky assets, with 46 percent of its endowment in a category labeled «alternative investments,» primarily hedge funds, private equity, and similar risky investment vehicles — a risk that was partially balanced by keeping fully 42 percent of the portfolio in U.S. Treasuries.