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Given the ongoing increase in interest rates, the value of bonds will come down. SO, is it time now to invest in bonds?

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  • Buy something now that will come down in value?
    – DJohnM
    Mar 30, 2018 at 3:36
  • Requests for specific investment buy/sell advice are off-topic. Mar 30, 2018 at 13:16
  • See How would bonds fare if interest rates rose? and other related questions at right. Mar 30, 2018 at 13:19
  • The optimal time to buy bonds is when interest rates are high and going to fall. In that case, the bonds will trade over face value after interest rates drop. But like all other market timing, this is easier said than done.
    – zeta-band
    Mar 30, 2018 at 15:44

1 Answer 1

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No.

People get this wrong over and over.

If you but a 30 year bond today (3% yield), and rates go to 5%, your bond will be worth 70% of what you paid for it, and your payments will be 60% of what someone buys the 5% bond at later.

You can't sell your bond when rates go to 5% and come out ahead: the reduction in value exactly offsets the benefit.

|Once you buy a 30 year, low-yield bond, you own the results for 30 years.

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  • So you are basically saying that we are still in a low-interest rate scenario, where rates can go higher, right?
    – Ignorant
    Mar 30, 2018 at 9:09

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