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The modern global tactical asset allocation program is composed of two separate strategies: strategic rebalancing and overlay. The strategic rebalancing element of GTAA program is designed to remove any unintentional asset allocation risk which can be caused by various factors, including: drift risk, which occurs when the value of underlying portfolio holdings moves away from the strategic ...
The latter are bonds that are, under contracted-for conditions, convertible into shares of equity. The stock-option component of a convertible bond has a calculable value in itself. The value of the whole instrument should be the value of the traditional bonds plus the extra value of the option feature. If the spread (the difference between the ...
Large-cap stocks are generally considered to be safer investments than their mid- and small-cap stock counterparts because they are larger, more established companies with a proven track record.
Asset classes and asset class categories are often mixed together. In other words, describing large-cap stocks or short-term bonds as asset classes is incorrect. These investment vehicles are asset class categories, and are used for diversification purposes. Multiple asset classes mixed together in a fund structure can provide an investor with ...
Just like gamblers place bets on boxers who fight in divisions based on their weight, investors, too, put their money down on stocks that are grouped together by size. All publicly traded companies...
Long/short covers a wide variety of strategies. There are generalists, and managers who focus on certain industries and sectors or certain regions. Managers may specialize in a category — for example, large cap or small cap, value or growth. There are many trading styles, with frequent or dynamic traders and some longer-term investors.
Compared to a longer-term bond, a short-term bond will typically offer a lower interest rate when all other factors are equal. Short-term vs. long-term bonds: Key differences
However, a small number of bonds, primarily corporate ones, are listed on exchanges. Bond trading prices and volumes are reported on Financial Industry Regulatory Authority's (FINRA) Trade Reporting And Compliance Engine, or TRACE. An important part of the bond market is the government bond market, because of its size and liquidity.