Bond prices are declining. What does that mean and how does the interest rate affect bonds and your portfolio?
What are the sources of bond returns? How do bond valuation techniques (credit and interest rates) affect bond prices?
Those who work with bonds have their own vocabulary. We’ve pulled together this handy glossary to clarify the terminology surrounding bonds.
We tend to think of bonds as the “safe” investment. Is that true? What are bonds and are they still a solid investment?
There is now a tendency for higher interest rates. Total bond returns equal the coupon (interest payment) plus the price change impact of any interest rate change. Neither the interest rate alone nor the interest rate change alone determine the total return. Both have an impact. In the long run, higher rates are good for [Learn more…]
In my previous post, I described what an I Bond is. Here I will offer a few examples of how I Bonds might make sense in an investment portfolio. Recall that I Bonds are a sort of inflation-protected savings account. They earn interest every year equal to inflation plus a (currently small) fixed rate. The [Learn more…]
I Bonds are a kind of inflation-protected savings account. In this article, I’ll describe their general characteristics and some of their limitations. In a follow up article, I’ll describe when I Bonds can make sense as an investment. Series I Savings Bonds: Protection against inflation Series I Savings Bonds are inflation-protected U.S. Savings Bonds. Also [Learn more…]