I have 1/3 on my savings in a bond fund. I live in Canada where interest rates are very low.
I know that the interest rates can't stay low forever, and I know from basic finance class that bond prices and interest rates are inversely related.
I'm hypothesising that when central bank raises the interest rates, I will loose a lot from this investment since the prices of the bonds will drop.
Is there a flaw in my logic? Is it wise to withdraw my investment from this bond fund ( It hasn't really made me or cost me anything since I started investing in it -- 6 months ago)