Older investors (concentrated abroad) need steady returns, lending to younger generations through bank deposits, bond purchases and life insurance premiums (which are reinvested in growth).
When you buy a corporate bond, you buy it at a price that gives you, over the life of the bond, an incremental yield over the yield on a Treasury of comparable maturity.
This hypothetical individual maintains a 75% stock and 25% bond allocation their entire working life.
That pattern continues every six months for the life of the bond.
Treasury inflation-protected securities, or TIPS, are so expensive that in most cases they guarantee investors a loss of purchasing power over the life of the bond.
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate.
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The next year the bond market roared back to life with a boost from the Federal Reserve, which allowed firms marred by bad capital structures to refinance billions in debt maturing by 2014 that was otherwise facing restructuring.
The upside over the life of the bond, if any, comes from any fall in interest rates and, in the case of corporate or emerging-market bonds, from a contraction in the credit spread that is, from the perception in the market that borrowers are more likely than they were to repay investors when the bond matures.
When the junk-bond market subsequently recovered, Executive Life's former policyholders saw none of the benefit.
Inside it, ING was selling variable and fixed annuities, which are mutual funds and bond-like investments wrapped in life insurance that, in policies like ING's, cost several times more than low-cost alternatives and provide minimal coverage.
That security is why people on a fixed income rather put their savings in US government bonds and get 3%, instead of putting half their life savings into a bond like the 10 month old, higher yielding, Oppenheimer Emerging Markets (OEMAX) mutual fund.
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It was a really special time in my life and I formed a close bond with those guys.
Think of those potentially redenominated Spanish bonds as toxic admixtures into bond portfolios all over the planet -- including possibly the bond portfolio that supports your pension or your life insurance claim.
"Imagine going through life and carrying around seven sacks of potatoes, " Bond says.
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Thanks to the magic of bond-premium amortization, that maneuver reduces your taxable interest income over the life of the bonds.
The bank made a cash offer for the junk-bond portfolio and arranged for a new insurance company, Aurora, to take over Executive Life's insurance contracts.
Bond and Fleming were both intelligence agents with a penchant for gambling and the finer things in life.
Low rates are also pressuring life-insurance companies, which rely in part on returns from high-quality bond investments to pay their obligations.
The tax-free earnings of paid-up life insurance give it a built-in advantage as its yields are closer to taxable bond returns.
It is here that Bond asks di Vicenzo to marry him, confessing that for her, he could leave behind his life of espionage.
"There aren't any good reasons for Japanese life insurance firms to rush to invest overseas, given the recent rise in domestic government bond yields, " Mr. Noji added.
How about taking some time out of our busy schedules to bond with our colleagues, get to know them a little better, do something fun together and enjoy life?
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