Can someone explain this article about bonds to me?
Posted: Sat Dec 07, 2013 12:33 am
http://www.madhedgefundtrader.com/the-b ... started-2/
So in the article it says:
Can someone explain this?
So in the article it says:
Don't you want the percentages on bonds to be higher? Surely you would rather a 10% yield to a 1% yield, since you will get more in interest when the bond matures? Or is there something I'm missing here? If the yield is too low, no one would bother investing their money in bonds. Especially if it's a 10 year or 30 year bond.The 30-year Treasury bond suffered horrific losses during the May rout, with yields rocketing from 2.5% to 4%. That means it has already lost its coupon for the year, and then some. Bondholders can expect to receive a long series of rude awakenings when they get their monthly statements.
Can someone explain this?