Bonds
⚠️ Bond values decrease when interest rates rise due to new bonds offering higher yields.
📈 Conversely, bond values increase when interest rates fall, making older bonds with higher coupons more attractive.
💰 Investors often prefer newer bonds with higher returns when central banks increase interest rates.
@CobasAssetManagement:
“Fixed income, including governmental and corporate bonds, is highly sensitive to interest rate changes. The annual interest offered by bonds is closely tied to the general interest rate set by the Central Bank. When interest rates rise, new bonds issued by governments and companies offer higher returns than previous bonds, making older bonds less attractive and reducing their value. Conversely, when interest rates fall, the opposite occurs.”
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Read more articles by the world’s top 100 analysts on Bonds at the following link. Bonds stock.
