Jim Bianco, president of Bianco Research, calculated an average annual gain of 11.8% for long-term bonds.
FORBES: How Have Bonds Outpaced Stocks Over The Last Three Decades?
Issuers are scrambling to refinance into proper long-term bonds, or asking banks for letters of credit.
It would also increase the demand for long-term bonds, thereby holding down long-term interest rates a little longer.
The alternative of banks issuing many hundreds of billions of pounds of long-term bonds also looks fanciful right now.
Two studies that I have seen recently suggest looking at long-term bonds instead.
For investors in long-term bonds, that is certainly soon enough to worry about.
They return about the same as long-term bonds with lower interest-rate risk and pay substantially better than short-term bonds.
He recommends investors look at long-term bonds with 10 years or more between the bond's call date and maturity date.
WSJ: SmartMoney: Watch Out! These Municipal Bonds Come With a Bit of a Kick
This means that the difference between short-term bonds (two-year Treasuries currently yield 1.02%) and long-term bonds (10-year Treasuries yield 3.77%) will narrow.
It could float long-term bonds to advance badly needed technology in equipment.
That is particularly true for long-term bonds, whose prices are more volatile.
Our research consistently demonstrates that short-term (five year maturity or less) paper has historically a much better risk-return tradeoff than long-term bonds.
In an environment where interest rates are projected to stay stable or fall over the next several years, long-term bonds have an appeal.
FORBES: How To Get More Diversification With Less Interest Rate Risk
Over the past year, the total returns on long-term bonds have exceeded those on the Dow Jones Industrial Average by a substantial margin.
Most investors seem to conveniently forget that long-term bonds lost some 12% in 2009 in the wake of news that the economy was recovering.
It doesn't make sense to buy long-term bonds at high prices now if the market is likely to reverse soon, some market participants say.
But the tax has had unintended consequences: the treasury is now struggling to find buyers for long-term bonds, which tend to be popular with foreigners.
The Fed instead extended its Operation Twist program aimed at keeping long-term borrowing costs low by selling short-term Treasurys and putting the money into long-term bonds.
This has led to an oddity what is dubbed an inverted yield curve: yields on long-term bonds have fallen below those of shorter-dated ones (which have barely budged).
In the private sector, companies' long-term bonds can be called in 5 years or 10 years after issuance, even if the bond's maturity is, say, 25 years.
It required banks to write down the value of assets (such as long-term bonds) to market value, even if the banks intended to hold them until maturity.
Ireland has already sold long-term bonds to private investors.
FORBES: After Mrs. Merkel's Irish Jig, Are Ireland's Problems Solved?
For instance, a number of high quality, blue chip stocks sport dividend yields comparable to long-term bonds AND they are selling at their best valuation levels in 20 years.
That is on top of interest payments well above those available in Japan, plus juicy capital gains as, thanks to falling interest rates, prices of long-term bonds have soared.
Central bankers like Ben Bernanke and Mario Draghi will try to inflate their way out of a low-return environment, a strategy that should kill long-term bonds Gross says.
FORBES: Pimco's Bill Gross Says Stocks Were A Ponzi Scheme For The Last Hundred Years
Munis were especially hard-hit by the rise in long-term Treasury yields because tax-exempt issuers, such as state and local governments, tend to issue more long-term bonds than do corporate issuers.
Investors who grasp for that last percentage point of yield and buy long-term bonds are making a gigantic bet that rates will fall even further or at least hold even.
The economy ministry also hopes to cut its interest burden by strong-arming pension funds (over sour looks from the big rating agencies) to swap short-dated government paper for long-term bonds.
Rising expectations that the Fed will pump more money into the financial system through additional purchases of long-term bonds, such as mortgage-backed securities, helped fuel a 1.1% increase in gold prices Wednesday.
There are several reasons, one of the more subtle among them being that the insurer can fund the product entirely with medium- and long-term bonds, since there are no payments in the short term.
应用推荐