Sentences with phrase «yield bonds need»

High - yield bonds need to pay more than safer alternatives to compensate for the greater likelihood of default.

Not exact matches

While investors will have to find stocks with higher yields, pay more for them and take on more risk in bonds, the biggest change in a permanently low - rate world is that people will need to set aside more of every paycheque if they want to keep the same goal for retirement income.

This makes sense; lower growth should result in bond yields falling, anticipating lower Bank of Canada rates in the future and less need for a risk premium around inflation.

In addition, housing and the economy should get a lift from the plunge in 10 - year U.S. government bond yields to 3 %, and, if the economy needs it, a new round of quantitative easing from the Federal Reserve.

People are looking more at the domestic situation and saying, «You know what, maybe we need a higher bond yield,»» Yardeni says.

«Powell obviously needs to raise the federal funds rate but he has one very important asset that could keep the 10 - year bond yield from blasting off.

Instead, bond investors need to be chasing yield.

To receive the full benefit of a bond ladder, one needs not only to stay the course for a number of years (so that lower yield and higher yield purchases benefit from cost averaging), but also with a relatively stable amount of capital.

The institutions are not only using the money to meet their own short - term financing needs, they are also borrowing additional money to purchase the bonds of troubled countries and earn the spread between the yields on those bonds and the much lower rate the ECB is charging them for money.

However, despite Italy's budget difficulties, Monti said that it would not need a bailout, although the country may want Europe's rescue funds and the ECB to buy its bonds so that yields come down to a more manageable level.

While she expected that bond yields might not fall too much near term as managers would need to allocate some funds to cash bonds, swaps and futures would likely remain under pressure.

A rise of 1 - 2 % isn't going to do much, and I don't think we'll rise by more than 1 - 2 % on the 10 - year bond yield anyway, so nobody needs to panic.

People need to pay attention to the 10 - year bond yield as it is signaling something negative may be about to happen in the equities market here.

«Yield spreads over developed market bonds are reasonable, and the opportunities for adding value are more extensive, although emerging market currencies may need to weaken further in the short term.»

With bonds yielding roughly 2.5 %, a typical stock - and - bond portfolio would need stocks to grow at 12.5 % annually in order to hit that overall 8.5 % target.

Note: HYG the $ 20bln high yield ETF yields 5.13 % in comparison, hence you might need to buy an out of favor sector like bricks and mortar retail, otherwise non-rated is likely where you will find > 7 % in the US domestic bond market.

Converting this to a TEB (Taxable Equivalent Basis) a non-IL resident in the top tax bracket would need to invest in a corporate bond yielding 7.6 % to match.

Tuesday April 24: Five things the markets are talking about U.S dollar bulls seem to have finally found some much needed support from interest rates as U.S bond yields climb toward levels unseen in nearly four - years.

Although decades of history have conclusively proved it is more profitable to be an owner of corporate America (viz., stocks), rather than a lender to it (viz., bonds), there are times when equities are unattractive compared to other asset classes (think late - 1999 when stock prices had risen so high the earnings yields were almost non-existent) or they do not fit with the particular goals or needs of the portfolio owner.

As Japan's JGB market has shown for a decade, you don't need high yields to see impressive gains in bonds.

For bonds to defend against declining equity values, where do bond yields need to fall?

However, breaking the carbon - carbon bonds, in order to shorten the molecular chains, is harder; extreme temperatures are needed, and often yield unwanted products.

Since yield is an important component of a bond investment's total return, investors need to be able to answer this question in order to accurately assess whether an investment is right for them.

If the AAA bond yield is 5.5 %, a stock would need to have an earnings yield of at least 11 % to meet the Rea - Graham criterion.

Income - seeking investors may need to consider exploring riskier areas of the bond market like high yield and EM bonds.

If you are an income investor with more than a five year horizon, you should be looking outside of the bond market for your income needs given the pitifully low yields on offer.

To be competitive in the marketplace, the bond's yield would need to change or no investor would want the bond.

The advice on avoiding high - yield debt needs more explanation, because bonds with high payouts are not especially sensitive to interest rate movements.

Same thing as a bond manager, I would drop out out if the new yield did not meet my yield needs.

If I were trying to balance the yield needed from bonds to compete with equities, it would look like this, then:

With stocks, we need to estimate future earnings, and apply a P / E multiple that is consistent with the future yield on BBB corporate bonds.

A second reason to be cautious about high - yield bonds is that they don't provide much stability in a portfolio when you're likely to need it most.

For this example, you'd need a taxable bond with a yield of 4 % to get the same return as a municipal bond.

Always interesting, Gross mentioned that in order to generate a level of return equal to the 7.5 % return bonds have delivered over the past 40 years, yields would need to drop to negative 17 %.

The moment incremental financing seems less likely or more expensive, companies that will need financing get re-evaluated by the market — stock prices move down, bond yields go up.

That's why investors need to make decisions based on a bond fund's yield to maturity.

Based on preliminary reviews of his clients living in Massachusetts, his initial estimate is that out - of - state muni bonds will need to generate as much as 0.40 % more in additional yield to offset new SALT limits.

As central banks move away from ultra-loose monetary policy, and the global economic expansion matures, bond fund managers will need to ensure their portfolios draw on a truly diverse range of sources of return and carefully consider portfolio risk if they are to generate yield in the current market environment.

Do rising U.S. Treasury yields and a steepening yield curve suggest an economic recovery is more certain, meaning less need for safe haven government bonds and a healthy demand for credit?

However, investors looking for a higher yield, without reducing the credit quality, usually need to purchase a bond with a longer maturity.

The tax - equivalent yield is the pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax - free municipal bond.

When considering bonds as investments, there are several pieces of information you need to know: The bond's coupon rate — or what it will pay in interest; how long before the principal amount of the bond matures, or if there is a call date; its recent price and current yield.

The higher the risk in a given bond, the higher its yield needs to be to compensate the investor for taking the risk.

You need a spreadsheet to predict the net effect on bond prices of both rate changes and changes of the yield curve (or position on the yield curve).

Another use of life insurance to reverse out an annuity, is when all you need for living expenses is a guaranteed after - tax - return that is slightly higher than current government bond yields, and you want to leave an estate after death.

Later, the article hems and haws over whether rising long rates would be a good or a bad thing, ending with the idea that the Fed could sell its long Treasury bonds to raise long yields if needed.

Stocks are harder to measure, so if you need better guidance, look at the yields on junk bonds.

In other words, you might take whichever part you don't need within a year and put in bonds (except for what you don't foresee needing within the next half decade or more, which you can put in stocks), then put the remainder in a simple high - yield deposit - insured savings account.

For a bond bubble to pop, you need the short financing rate to rise above the yield of the long bonds being financed.

While investors will have to find stocks with higher yields, pay more for them and take on more risk in bonds, the biggest change in a permanently low - rate world is that people will need to set aside more of every paycheque if they want to keep the same goal for retirement income.