But while he agrees that bonds may be one of the worst investments over the coming decades, he warns that it can be very expensive to short bonds
A well-known stylized fact about financial markets is that average returns on stocks, long government bonds, and corporate bonds are higher than the return on short bonds
These short bonds
and the unusual crystalline structures of the compounds yield the blue hue, the team reports in the Dec.
The fund will invest in highly liquid and publicly traded bonds and short bonds
through the swaps market.
In addition to short bonds, investors can buy N other zero-coupon bonds, which--together with the short bond--we refer to as spanning bonds.
All three instruments are represented by essentially constant portfolios of only two bonds: T-bills correspond to about 80% short bonds and 20% middle bonds, that for corporate bonds corresponds to about 60% middle bonds and 40% long bonds, and the replicating portfolio for municipal bonds has 70% long bonds and 30% middle bonds.
Of course, short bonds yield less than those with longer time horizons, since investors don't expect the same kind of reward for lending money for five years as they would for 10.
20% Short bonds Scudder Preservation Plus Income Fund
The rise in demand for short bonds is equivalently a rise in the supply of money services, pushing down the nominal price [p.
Money is then lent by bankers in short passbook loans to entrepreneurs and consumers in the very Walrasian market for short money services -- that is, in the short bond market -- as demand deposits.
Newell employed a modified arbitrage trading strategy, in which he bought bonds trading lower than government bonds in general and sold short bonds