West Loop Financial LLCNews Floating-Rate Note Funds: Too Good to Be True? – West Loop Financial LLC https://www.westloopfinancial.com Evolutionize Site Wed, 19 Aug 2020 20:50:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 News Floating-Rate Note Funds: Too Good to Be True? https://www.westloopfinancial.com/2016/02/29/news-floating-rate-note-funds-too-good-to-be-true/ https://www.westloopfinancial.com/2016/02/29/news-floating-rate-note-funds-too-good-to-be-true/#respond Mon, 29 Feb 2016 09:00:13 +0000 http://evolvemypractice.com/?p=2628 Every time interest rates are low, investors begin to make mistakes. They tend to engage in activities that they otherwise wouldn’t undertake—such as stretching for yield by taking on credit risk—if rates were at more “normal” levels like 4% or 5%. With Treasury yields having been at extremely low levels for seven years now, and...

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]]> Every time interest rates are low, investors begin to make mistakes. They tend to engage in activities that they otherwise wouldn’t undertake—such as stretching for yield by taking on credit risk—if rates were at more “normal” levels like 4% or 5%.

With Treasury yields having been at extremely low levels for seven years now, and with money market accounts paying virtually nothing, many investors haven’t been able to resist the siren call of higher yields, especially if they can get them without taking term risk (the risk of rising interest rates). Unfortunately, investors frequently seem to forget that yield and return aren’t synonymous.

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