Financial FitnessGeneral Information

The Ups and Downs of Bonds

By October 3, 2019 No Comments

So far this year we have seen the interest rates on bonds drop substantially and according to BTN research, the bond market through the end of July is up 6.3% year-to-date.  The last time the bond market had a calendar year performance better than 6.3% was way back in 2011 or eight years ago, when bonds gained 7.8%.

As you may recall from a previous videos, there is an inverse relationship between the yields of bonds and the prices of bonds, as you can see from my drawing, as yields go down, the value of bonds go up and as interest rates go up bond prices go down.

With the 10 year treasury near 1.60% compared to over 3.00%  in October 2018, the returns on bonds has been good.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  All performance referenced is historical and is no guarantee of future results.  All indices are unmanaged and may not be invested into directly. 

Bonds are subject to market and interest rate risk if sold prior to maturity.  Bond values will decline as interest rates rise and bonds are subject to availability and change in price.