Should You Own Bonds When Interest Rates Rise?
August 24, 2022
It’s no secret that this has been a tough year for the stock market. But if you own bonds, you may also have some concerns.
What’s happened is that the Federal Reserve has been raising interest rates to fight inflation. This can cause the value of your existing bonds to drop, because investors will want to buy the newly issued bonds that pay the higher rates.
Still, bonds continue to offer you some key benefits. For one thing, as long as you hold your bonds until maturity, you’ll continue to receive the same interest payments. Also, bonds can help reduce the effects of market vol...