Dash To Trash

DEFINITION of 'Dash To Trash'

When investors flock to a class of securities or other assets, bidding up prices to beyond what can be justified by valuation or other fundamental measures. While the dash-to-trash effect can occur within any type of security, the phrase is typically used to describe low-quality stocks and high-yield bonds, both of which can be subject to periods of overbuying in the markets.

BREAKING DOWN 'Dash To Trash'

As the name graphically implies, investors are buying low-quality assets or assets that do not correctly price in the risks associated with them. The dash to trash often occurs near the end of a prolonged bull market, when investors begin to seek higher returns regardless of the risks involved. The longer it has been since a market downturn, the more likely it becomes that large pockets of investors will feel bulletproof.

RELATED TERMS
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave ...
  2. Intermarket Analysis

    The analysis of more than one related asset class or financial ...
  3. Market Is Up

    A common phrase meaning the stock market (or a major market index) ...
  4. Asset Valuation

    A method of assessing the worth of a company, real property, ...
  5. Asset Class Breakdown

    The relative percentages of core asset classes such as equities, ...
  6. Bid Price

    The price a buyer is willing to pay for a security. This is one ...
Related Articles
  1. Bonds & Fixed Income

    High-Yield Corporate Bonds: Issuers and Investors

    High-yield bonds play a significant role in various investment portfolios. An examination of the issuers' and investors' side is vital.
  2. Investing

    High-yield Bond Investing: Information Is Key

    Access to and analysis of relevant information are the key to success in the high-yield bond market.
  3. Investing Basics

    What is an Asset Class?

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations.
  4. Mutual Funds & ETFs

    3 High-Yield Mutual Funds to Avoid in 2016 (PDHYX, FEHAX)

    Discover three high-yield bond mutual funds that investors should avoid due to their poor fundamentals and unfavorable risk-reward profiles.
  5. Investing

    The Pros and Cons of High-Yield Bonds

    Junk bonds are more volatile than investment-grade bonds but may provide significant advantages when analyzed in-depth.
  6. Bonds & Fixed Income

    The Issuance Procedure of Corporate High-yield Bonds

    Issuing debt over equity can have several advantages for companies. Here we have a detailed look on the issuance procedure of corporate high-yield bonds.
  7. Investing

    Is the Junk Bond Market Signalling a Correction?

    Is the junk bond market signalling a correction?
  8. Mutual Funds & ETFs

    High Yield Bonds Thankful After Start of Year Outflows (TFCIX, HYG)

    Learn the reasons behind the inflows to high-yield bond ETFs in February 2016 after a year of outflows, and decide whether investors should be shouldering risk again.
  9. Bonds & Fixed Income

    Bonds: They're Not Just For Seniors

    In this article, we'll show you how investors at any stage of life can keep these fixed-income investments. Keep Reading.
  10. Bonds & Fixed Income

    3 Risks U.S. Bonds Face in 2016

    Learn about the major risks for the bond market in 2016; interest rate increases, high-yield bond volatility and a flatter yield curve may be issues.
RELATED FAQS
  1. Why has the market for high yield bonds grown so much?

    Discover information on the high-yield bond market and learn the reasons why this investment market has grown so rapidly ... Read Answer >>
  2. What are some examples of high yield bonds?

    Understand the nature of high-yield bonds and discover some examples of companies that become issuers of high-yield debt ... Read Answer >>
  3. Why are high yield bonds typically lower rated bonds?

    Read about the high-yield bond market, who determines which bonds are considered "high yield" and why lower-rated bonds need ... Read Answer >>
  4. How safe are high yield bonds?

    Learn how high-yield bonds have a greater risk of default than investment grade bonds and why they offer higher amounts of ... Read Answer >>
  5. Where do investors tend to put their money in a bear market?

    A bearish market is traditionally defined as a period of negative returns in the broader market to the magnitude of between ... Read Answer >>
  6. What forms of debt security are available for the average investor?

    Discover the various different types of debt securities, issued by government entities or corporations, that are available ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center