No. of Recommendations: 1
Greetings brucedoe...

You will be buying at a high if you do this, although the income should increase as the price of bonds falls. Maybe this is important to you?

I haven't studied the bond market I'm afraid. I just know that it is financially prudent to allocate your assets as best you can. I have never thoroughly understood the correlation between bonds and the interest rate.

Basically, what I understand (I think) is that when interest rates go values (meaning both purchase price [NAV] and yield for new bonds) go down. Is that basic assumption correct? I have also heard that even if a person invests in a widely diverse total bond index fund that they would loose some, but not a significant portion, of their investment if interest rates go up.

Also, how is periodic income How do they work?

I appologize, I should have done my homework. Any lessons given, however, will be gratefully received.


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.
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.