24 min
Are Bonds Riskier with Low Interest Rates? Broken Pie Chart
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- Investing
Bonds prices are a function of current interest rates compared to their present value of cash flows and return of capital (baring defaults) at maturity. So, with interest rates so low around the world, is this a period of higher risk in bonds (fixed income)? How much more sensitivity to interest rate changes do we currently see in the sector? How do callable bonds mute the positive effects of reductions in market rate of interest? How does the US Aggregate Bond Index compare to the Global Ex-US Aggregate Bond Index from a yield and duration risk comparison? Derek Moore discusses these and other aspects of evaluating risk in bonds due to changes in interest rates.
What is duration risk in bond portfolios?
Comparing duration and yields between US Aggregate Bond Index and Global World EX-US Aggregate Bond Index?
Negative yield to maturity bonds in Europe and Japan
How does lower rates extend duration risk in bonds?
How do callable bonds potentially mute upside market move in bonds when rates fall?
Bonds market value a combination of present value of cash flows (interest payments) and return of capital at maturity
What are call provisions on corporate bonds?
Investor expectation of annual returns equal to the current yield to maturity?
2018 when both stocks and bonds via the US Aggregate Total Return Index were negative
Mentioned in this Episode:
Short Selling Terms Explained through Tesla https://podcasts.apple.com/us/podcast/short-selling-explained-tesla-short-interest-short/id1432836154?i=1000463711042
Explaining negative yielding bonds https://podcasts.apple.com/us/podcast/wacky-negative-yielding-bonds-need-for-alternative/id1432836154?i=1000442461907
Real returns vs nominal returns above inflation https://podcasts.apple.com/us/podcast/importance-real-returns-above-inflation-how-to-calculate/id1432836154?i=1000440384756
Myths of the 60/40 stock/bond portfolio https://podcasts.apple.com/us/podcast/discussing-myths-around-the-classic-60-40-portfolio-part-i/id1432836154?i=1000434346248
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek www.razorwealth.com
Bonds prices are a function of current interest rates compared to their present value of cash flows and return of capital (baring defaults) at maturity. So, with interest rates so low around the world, is this a period of higher risk in bonds (fixed income)? How much more sensitivity to interest rate changes do we currently see in the sector? How do callable bonds mute the positive effects of reductions in market rate of interest? How does the US Aggregate Bond Index compare to the Global Ex-US Aggregate Bond Index from a yield and duration risk comparison? Derek Moore discusses these and other aspects of evaluating risk in bonds due to changes in interest rates.
What is duration risk in bond portfolios?
Comparing duration and yields between US Aggregate Bond Index and Global World EX-US Aggregate Bond Index?
Negative yield to maturity bonds in Europe and Japan
How does lower rates extend duration risk in bonds?
How do callable bonds potentially mute upside market move in bonds when rates fall?
Bonds market value a combination of present value of cash flows (interest payments) and return of capital at maturity
What are call provisions on corporate bonds?
Investor expectation of annual returns equal to the current yield to maturity?
2018 when both stocks and bonds via the US Aggregate Total Return Index were negative
Mentioned in this Episode:
Short Selling Terms Explained through Tesla https://podcasts.apple.com/us/podcast/short-selling-explained-tesla-short-interest-short/id1432836154?i=1000463711042
Explaining negative yielding bonds https://podcasts.apple.com/us/podcast/wacky-negative-yielding-bonds-need-for-alternative/id1432836154?i=1000442461907
Real returns vs nominal returns above inflation https://podcasts.apple.com/us/podcast/importance-real-returns-above-inflation-how-to-calculate/id1432836154?i=1000440384756
Myths of the 60/40 stock/bond portfolio https://podcasts.apple.com/us/podcast/discussing-myths-around-the-classic-60-40-portfolio-part-i/id1432836154?i=1000434346248
Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek www.razorwealth.com
24 min