UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next
Author: xcskier One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35367  
Subject: bond-fund returns Date: 1/9/2005 1:29 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Help...here's a really basic question about the relationship between "interest rates" and bond-fund returns.

A report on a intermediate-term bond fund on Morningstar uses the following phrases: in March-April of 2004 the entire bond market was hit by rising interest rates and so investors had negative returns. But INTEREST RATES SOON FELL boosting returns for the entire year.

Now, what interest rates are these that fell in the latter part of the year?

So far as I understand, the prime rate set by the FOMC has only been slowly rising for the past 18 months. And if the report refers to the auction price (face value) of government bonds/notes, is it correct to call that "interest rate"? Isn't what falls when the auction price rises actually the yield?
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev | Next


Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Value Hounds

Clorox Isn't Cleaning Up
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.