How Bonds Work: The Relationship Between Yield and Inflation
- 1Bond prices are an estimate of what others are willing to pay, rather than the amount promised by the issuer.
- 2Investors who experienced a 12% decline in bond funds over the past five years tend to sell.
- 3Since 1881, the 91% ratio of the initial 10-year yield of 10-year Treasury bonds explains the volatility of bond yields over the following 10 years.
So what's the key point?
Bond prices are an estimate of what others are willing to pay, rather than the amount promised by the issuer.
Source Real Investment Advice · View original ↗
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