Cue the 100 watt bulb!

[anigo]

Let's say you have a 10-year, $5,000 bond with a coupon rate of 5%. If interest rates go up, new bond issues might have coupon rates of 6%. This means an investor can earn more interest from buying a new bond instead of yours. This reduces your bond's value, causing you to sell it at a discounted price.

New bond issues might have a coupon rate of 6%.

Nobody told me that we were comparing old bonds to new bonds. I thought the company always sold bonds for the same amount of money and at the same interest rate. Yay for the internet!! (Thanks gunhed)

Further in an article...

In a bullish bond market, investors buy bonds to take advantage of an expected fall in interest rates and a rise in bond prices.

I thought that read "In a bullshit bond market". Well, my friends, if you're looking for the bullshit market, you've come to the right place.

Comments

[fyremaven.livejournal.com]

geez, i read that as 'bullshit market' too....must be something about the print!
:)

i'm glad you got that cleared up. now can you tell me why/if i should invest in gold? like you know, those things they sell for about $438 each. i keep hearing what a 'great investment these are' but why? i cant use them at the market...do they appreciate a lot? where do you store them?? not at home, i'll bet.

hmmm, that's if you know, of course.

[jynxgirl.livejournal.com]

http://www.eaglewing.com/why.html

Excerpt of Why say Yes to Gold:
The appreciation of the gold price makes up for lost interest, especially in a bull market.

The last three years are just the beginning of a major bull move similar to the 70's when gold moved from $38 to over $800.

All gold funds are well above their three year lows and in a general uptrend with bullion.

Many gold funds have reached eight year highs recently, indicating they are still in a definite uptrend.

The short position held by hedge funds is being methodically reduced.
With the recent devaluation of many international currencies, the U.S. dollar was the international safe haven of last resort. We are seeing signs of this ending due to many financial factors, the most important one being a falling dollar.

There are over One Trillion dollars ($1,500,000,000,000) of U.S. debt owned by foreigners which could be repatriated under certain conditions. This could cause a major decline in the value of the dollar and a soaring gold price.

Consumption of gold has exceeded production for the past ten years, and when the low price of gold fell below production cost, many gold mines reduced production or shut down.

If you believe in 'buy low, sell high', gold is still low, but climbing.

[fyremaven.livejournal.com]

thank you SO much for all that good information! i really appreciate it, and it has helped me make a few decisions. i was already going to buy the gold for investment purposes and was just looking for more sources of info...and not some of the stuff i read online because you can find opposing viewpoints on anything if you look.

you've really helped. thanks!

[jynxgirl.livejournal.com]

No problem. I just googled Why Buy Gold.

[gunhed.livejournal.com]

Not saying you shouldn't, but...

Gold only has value as long as people want it. It does have some practical values but for the most part it's expensive (and a "good investment") only because some people are willing to pay a lot for it.

And, like most investments, if you can't find someone to buy it when you want to sell it it's worthless - even if it's gold.

[fyremaven.livejournal.com]

that's true too, but i'm betting that people will be wanting gold for awhile yet. the other thing that's confusing is the purity level in the gold products offered. i noticed that the canadian 'gold maple' coin is .9999 pure while the american 'gold eagle'...and the krugerand happen to be only .9167 pure. is that going to play into the value of the gold in the future?? right now the gold maple coin is very slightly less (like $2) than the gold eagle.

kitco bullion products has a site that sells these product.

but thanks again for your input, i really appreciate your viewpoint.

[jynxgirl.livejournal.com]

I read it as bullshit too.

[gunhed.livejournal.com]

Glad I could help. I wasn't really awake when I found that article but I hoped it would lead you in the direction you needed.