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Tuesday, July 9, 2013

Why Bond Prices Drop When Interest Rates Rise

When interest rates go up, fixed-rate bond prices fall. This is a fundamental principal of bond investing known as interest rate risk.

Bonds may be an important part of you investment portfolio.  That’s why recent articles in the media about declines in bond prices due to the potential rise in interest rates may have caught your attention.

The Securities and Exchange Commission recently issued an investor bulletin regarding interest rates and bond prices that explains interest rate risk in more detail.

Be a savvy investor and learn more about the relationship of bond prices and interest rates.

A Primer for Investing in Bonds
For even more information about bonds, be sure to check out DFI’s and the Investor Protection Trust's free guide to investing in bonds.

This online booklet will teach you what bonds are, how they work, the different type of bonds, and more.