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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35345  
Subject: Re: 10 year treasuries Date: 12/27/2013 9:42 PM
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BenHacker,

You wrote, The only issue is that unlike a CD, you have no guarantee of what you can sell the bond for in the interim. If interest rates go up 2% next year, that 3% won't seem so good, but you'll be stuck with it because your bond will drop >10% in value to compensate new owners for the new higher interest rate paradigm.

In the case of a CD you can pay a fee to get your money out, but that is not the case in the bond market... the market sets the rates and you take or leave them.


Just to complicate things, let me point out that brokered CDs DO work exactly like bonds and Treasuries. What you are referencing are typical bank CDs that are bought directly; but if you buy a CD through your broker, it's typically a brokered CD and the price on those do tend to fluctuate based on interest rates.

BTW, found any new undervalued investments lately? ;-)

- Joel
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