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

[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.