Tag Archives: rising rates

Rising Interest Rates – Boon or Bane for Pan Asian Dividend Strategies?

In December 2016, the U.S. Fed raised the interest rate for the second time in the current rate hike cycle.  Three more rate hikes were expected for this year, one of which took place in March.  In a low interest rate environment, companies that have increasing dividends or offer high dividend yields look attractive to Read more […]

Rising Rates Arrive

Which of the figures below belong together?   It’s obvious, even if analogies aren’t your strong suit, that A is like C and B is like D.  A and C are not like B and D. The economic relevance of this simple visual exercise is this: At its March 2017 meeting, the Federal Open Market Read more […]

No News, and No Implications

This morning’s Wall Street Journal reported, rather breathlessly, that “U.S. bond yields are topping a key measure of the dividends that large U.S. companies pay—a shift that has broad implications for investors….”  The headline was triggered by the observation that the 2.50% “yield on the 10-year U.S. Treasury note…exceeded the 1.91% dividend yield on the Read more […]

Rising Rates Environment Doesn’t Hurt All REITs

In a positive sign for the U.S. economy, the Federal Reserve raised the federal funds target rate in December 2016 and penciled in another three hikes in 2017.  While investors may welcome higher interest rates earned from their cash deposits, high-yielding instruments that carry debt can be adversely affected due to higher borrowing costs.  Conventional Read more […]

Monetary Cycles and the Fixed Income Market – What Can the Past Tell Us About the Current Cycle?

Rising rates are generally seen as bad news by fixed income market participants.  As rates go up, prices of fixed income assets are expected to go down.  However, returns (or losses) can vary depending on characteristics of the cycle, as well as the amount of income or carry available to cushion the decline in price. Read more […]

Rising Rates Revisited…

The prospect for and ramifications of rising interest rates have surfaced time and again in recent years. Whether and when the Fed will raise rates next is anyone’s guess. But as we’ve noted before, the correlation between higher interest rates and equity declines has grown tenuous in recent history.  Since 1991, the S&P 500 has Read more […]

Floating Securities in Advance of Rising Rates

This Wednesday, the Fed announced that they would begin raising rates, a decision that has left many investors with questions about how they will fare in this changing environment.  Knowing that conventional, fixed-rate securities sometimes lose value when interest rates increase has some investors looking to floating-rate securities instead.  Floating-rate securities are designed to mitigate Read more […]

The Best of Times and the Worst of Times

Since roughly the beginning of May, U.S. interest rates have been in an uptrend, with the 10 year Treasury note ending last week at a yield of 2.5%. Equity markets, not surprisingly, have reacted by weakening, especially in last week’s trading. Some of us of a certain age will admit to a degree of bewilderment Read more […]