Skip to main content
No. of Recommendations: 2
Thanks.

I'm curious whether you saw/read the following article? And if you generally agree with it?

https://portfoliocharts.com/2019/05/27/high-profits-at-low-r...


Bond convexity basically means that the sensitivity of a bond to interest rate changes is not constant. It’s also not linearly related to rates. In fact, it accelerates as rates drop, and the amount of acceleration depends on how much time is left on the bond.


The writer said the key takeaway is:


Because of convexity, bonds have way more income potential at very low or even negative rates than most people realize.


I thought it was a good write up although I'm not sure his key takeaway was the same as mine.

Rich
Print the post  

Announcements

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.