No. of Recommendations: 0
I am buying bonds and preferreds and wonder if somebody may give me some insight as to what affects the price of these investments. For example, I understand that bonds are bought on auction just as a stock is: therefore if demand is up (as it might be now when the market is weak)the price may go up. But when Greenspan raises interest rates the value (price?) of the bond drops. So, if I am holding a bond, and the market is weak, can I assume that the value will increase as demand goes up, while if interest rates are increased by the Fed, the price will then drop?

What about preferreds: in an attempt to get addiitonal yield I am looking at various high grade preferreds. Are the preferred prices affected in a similar manner as described above for bonds.

Thank you
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
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.
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 Glassdoor #1 Company to Work For 2015! 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.