Home > Uncategorized > After Fed, Search for Yield to Intensify – WSJ.com

After Fed, Search for Yield to Intensify – WSJ.com

September 17, 2012 Leave a comment Go to comments

With the Fed saying it planned to continue bond purchases until the economy shows sustained improvement and pledging to keep rates low until mid-2015, these trends could potentially play out for years to come.

“The search for yield is going to go on for longer and may still grow more intense,” said Rebecca Patterson, chief investment officer at Bessemer Trust. “Whether we’re talking about high dividend stocks, corporate bonds or emerging-market bonds, all those things will continue to find support.”

But the rising prices mean investors are accepting smaller returns to take on those risks than would have been the case not long ago. The Fed “is putting a lot of investors in a place where they wouldn’t normally be comfortable,” Ms. Patterson said.

Starting with the Fed’s first round of bond buying, known as quantitative easing, in late 2009, the Fed has steadily squeezed investors out of the safest investments. It has done so by big purchases of bonds, mainly Treasurys.

via After Fed, Search for Yield to Intensify – WSJ.com.

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