re: #117 Flounder

The yield and price of a bond are inversely related so that when market interest rates rise, bond prices fall and vice versa.

Yes. The price if you buy it. Not the price if you have already bought it. This is pretty easy to understand.

Today, I buy a $10,000 bond due to mature in ten years at a rate of 0% interest. Whoo.

Tomorrow the rates skyrocket up to 20%. Fuck. But you know what? My bond is still going to be worth $10,000 in ten years. The principal doesn’t change. That is, in fact, the whole fucking point of bonds, really.

Dude, I don’t get why you do this: You assert things that are totally untrue and then it takes like twenty fucking posts before you eventually admit you were wrong, and then you go on again.

And sure, there are corner cases of bonds that depend on foreign exchange rates. But the vast majority of bonds are government bonds, civic bonds, etc. etc. which are just simple, straightforward bonds. Those linked bonds aren’t really true bonds, they use bond status but they’re actually purposefully engaging in risk. The real investment there is in the foreign currency, or the commodity index, etc.