Investing In Bonds?
Wednesday, November 22nd, 2006
If interest rates are high, should you be looking at investing in bonds? Especially fixed rate bonds; traditionally, high interest rates mean that bond prices are low, helping you lock into a high return.
Floating rate bonds like the 10 year treasury are a different option; the rates on these change as the economic outlook and market rates change; these usually have a lower interest rate than market, since these are considered to have no risk at all.
T-bond rates have had a small decline over the last 6 months - with a positive outlook for the near future, it might mean that the current high rates won’t stay as high.
If you believe that interest rates have peaked, it’s worthwhile investigating high return fixed rate bonds. Consult your financial advisor before making any investments.
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